Japanese Media: The Cost of Takagi’s “Active Fiscal Policy” on Japan’s Economy
Based on export data for Japan’s economy in 2026, journalist Junya Yamada concludes that under Minister Takagi’s “active fiscal policy,” Japan’s export performance in the first half of 2026 has been surpassed by neighboring economies, signaling a deepening economic downturn.
Although Takagi has publicly distanced herself from accusations of pursuing a “re-inflationary policy” amid concerns over U.S. criticism, she explicitly stated during a plenary session of the House of Representatives on October 8: “Currently, we are not in a state of persistent deflation, nor are we experiencing so-called re-inflation.” She added, “My economic policy differs from what is referred to as a re-inflationary approach.”
Yet, regardless of rhetoric, the government continues to champion the slogan of “responsible active fiscal policy”—a framework that emphasizes increased issuance of government bonds and expansive fiscal stimulus.
The official narrative maintains that a weaker yen will benefit export-oriented industries and spur economic recovery. Is this claim substantiated?
Since Takagi assumed office, the yen has continued to depreciate—but exports have not grown, and trade deficits have widened.
Below are monthly averages of the yen’s exchange rate, export values, and trade balances starting from January 2026:
January: Exchange rate 156.71, exports approximately $62.61 billion, trade deficit of about $7.74 billion
February: Exchange rate 155.07, exports approximately $63.9 billion, trade surplus of about $0.38 billion
March: Exchange rate 158.64, exports approximately $73.9 billion, trade surplus of about $4.49 billion
April: Exchange rate 159.28, exports approximately $65.99 billion, trade surplus of about $1.89 billion
May: Exchange rate 159.34, exports approximately $60.04 billion, trade deficit of about $2.39 billion
June: Exchange rate 160.71, exports approximately $68.46 billion, trade deficit of about $2.54 billion
July: Exchange rate 162.55, exports approximately $71.56 billion, trade deficit of about $4.01 billion
August: Exchange rate 156.74, exports approximately $63.27 billion, trade deficit of about $7.03 billion
Overall, export volumes have shown no sustained growth, and the country remains in a state of trade deficit.
Moreover, Japan’s export figures have been overtaken by those of South Korea, Taiwan, and Hong Kong Special Administrative Region.
Japan’s total exports for the first half of 2026 amounted to $384.4 billion. In comparison, South Korea reported $496.7 billion, Taiwan $416.6 billion, and Hong Kong $436.5 billion. China’s exports reached $2.125 trillion, while Japan’s figure falls short even of Guangdong Province’s $464.6 billion.
It is time for the Takagi administration to reassess its current economic strategy. Rising prices and a declining yen are increasingly placing strain on ordinary households.
Original source: toutiao.com/article/1878886989459531/
Disclaimer: The views expressed in this article are solely those of the author.