Japan PM Keeps Economy Team, Boosts Women in Cabinet Revamp

Japanese Prime Minister Fumio Kishida kept his finance and trade ministers in place while adding more women to his cabinet in a reshuffle aimed at freshening his government’s image.

(Bloomberg) — Japanese Prime Minister Fumio Kishida kept his finance and trade ministers in place while adding more women to his cabinet in a reshuffle aimed at freshening his government’s image.

The premier kept his core policy team in place in the Wednesday revamp, as he seeks to work quickly to introduce new economic stimulus measures, something he has cited as a priority. 

Price gains continue to outpace wage increases, eating into household spending power and weighing on approval for Kishida’s cabinet. Support crept up by three percentage points to 36% in a poll conducted by NHK between Sept. 8-10, after he expanded and extended subsidies for gasoline. 

Read More: Japan’s Households Cut Back Spending as Kishida Mulls Measures

While Kishida need not face a national election until 2025, a further fall in popularity could see him struggle to stay on as leader of the long-ruling Liberal Democratic Party in a vote due a year from now.

“I want to carry out bold economic measures,” Kishida told reporters in India on Sunday where he was attending the Group of 20 summit. “This must be done with all haste, so when the new structure is in place, I want to get off to a running start.” 

The premier appears to have prioritized balancing the interests of the various factions within the LDP, said Tomoya Suzuki, economics researcher at NLI Research Institute. That leaves doubts about how far the reshuffle will help promote his policies, he added. 

Kishida retained Finance Minister Shunichi Suzuki as well as Economy, Trade and Industry Minister Yasutoshi Nishimura, Chief Cabinet Secretary Yoshikazu Matsuno told reporters. He appointed a new minister for economic revitalization, Yoshitaka Shindo, in what could be a pointer to the cabinet’s budgetary stance, according to Takuji Aida, chief economist at Credit Agricole Securities Asia. 

Shindo, a former vice minister at METI, replaces a former bureaucrat from the Finance Ministry, known for its fiscal conservatism. 

“Rather than reining in spending, this brings efforts to expand the economy through investment to the fore,” Aida said, adding Shindo could work in tandem with the like-minded Nishimura, conveying a positive impression to markets previously held back by Kishida’s reputation for favoring a more austere line.  

What Bloomberg Economics Says…

“Don’t expect major changes in economic and fiscal policy after this cabinet reshuffle as the key ministers are staying in place. Rising interest rates are a headache for the cabinet, so the cost will likely remain on a reasonable scale.”

— Taro Kimura, economist

Among the executives in his ruling party, Kishida kept Toshimitsu Motegi, a potential rival for the party leadership as LDP No. 2. Party policy chief Koichi Hagiuda also remained in his post. 

Minoru Kihara, a five-term member of parliament, will take over as defense minister for his first cabinet posting.

Previous prime ministers have seen support jump after appointing more women to their cabinets. Kishida’s latest line-up includes five women, equaling a previous record, with the most prominent being former Justice Minister Yoko Kamikawa as foreign minister. 

Women will also be allotted positions covering policy on children, regional revitalization and reconstruction, while Sanae Takaichi will retain her seat as minister in charge of economic security. 

Eleven ministers are joining the cabinet for the first time, according to public broadcaster NHK. Deputy Chief Cabinet Secretary Seiji Kihara, a close aide to Kishida, was replaced by Hideki Murai, a fellow alumnus of the Finance Ministry. 

(Updates throughout with official announcement.)

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