TOKYO, Sept 17 — Japan’s Prime Minister Sanae Takaichi retained her key ministers in a cabinet reshuffle Thursday aimed at solidifying the ruling coalition and advancing a food tax cut despite concerns over how it will be financed.

Prime ministers in Japan routinely shuffle their cabinets to refresh the government’s public image and to distribute ministerial posts to loyal supporters and experienced lawmakers from their party.

But Takaichi – who has unusually high approval ratings nearly a year into office – kept core members of her team, according to a cabinet list announced by her right-hand man and top government spokesman, Minoru Kihara.

They include Kihara, finance minister Satsuki Katayama, foreign minister Toshimitsu Motegi, and defence minister Shinjiro Koizumi.

“Without economic growth, we can’t maintain sustainable finance,” Takaichi told reporters, pledging to keep pursuing her “responsible, proactive fiscal policy”.

Through inducing domestic investment, thereby increasing employment and household income, “we aim to realise a virtuous cycle” of economic growth that allows Japan to increase tax revenue, she said.

The prime minister also retained key economic ministers, including trade and industry minister Ryosei Akazawa, who has led Japan’s tariff negotiations with the United States, and economic growth strategy minister Minoru Kiuchi, who favours active fiscal spending.

Under finance minister Katayama, Japan has repeatedly intervened in the foreign exchange market to prop up the falling yen, including a rare joint intervention with the United States.

The small-scale reshuffle comes as Takaichi navigates rising inflation and a weak yen while pursuing a consumption tax cut on food starting next year.

While Takaichi’s tax cut pledge is popular among voters, economists have criticised the plan, warning that she has failed to identify around five trillion yen (RM134.4 billion) needed annually to fund it.

Takaichi’s policy of expansive government spending – as well as the Bank of Japan’s relatively low-key interest rate – has also rattled the markets, pushing Japan’s benchmark bond yield to around 3.0 per cent, its highest level in three decades.

“We will ensure market confidence by strengthening communication” with voters and market participants, giving explanations of policy “with a high level of transparency”, she said when asked about market concerns over her fiscal policy’s sustainability.

On defence, Koizumi remains tasked with updating Japan’s foundational national defence strategy documents alongside implementing a push to expand sector spending.

“Revising our strategy is something that has a major impact on Japan’s security and on the entire region,” Koizumi told reporters after he was reappointed.

He said the defence ministry “must marshal all our resources and move forward with a greater speed” with the review.

Takaichi also assigned the post of minister in charge of regulatory reform to Hiroshi Nakatsuka, 70, a member of the LDP’s coalition partner, the Japan Innovation Party.

The JIP formed a ruling alliance with Takaichi’s conservative Liberal Democratic Party in October but until now had chosen not to join her cabinet. — AFP