Hiroko Ota has once more been quick off the mark in making her presence felt, in particular she strongly stressed that now "is not the time to increase fiscal spending". This is obviously the case, but the impact of this, if she sticks to her guns, may well be significant on Japanese GDP growth going forward, particularly on the contribution which can be made to overall growth from public investment.
Japanese Economics Minister Hiroko Ota, reappointed in a reshuffled cabinet, said on Tuesday that she opposed an increase in government spending in Japan."It is not the time to increase fiscal spending," Ota told a group of reporters, adding the government needed to continue its reforms.
Meantime Fukushiro Nukaga has been busying himself making clear that he does not think that Japan's deflation is completely over and he that wants the central bank to carefully watch world economic and domestic data to avoid making too many mistakes. These statements, while eminently reasonable and plausible, were widely seen by financial commentators as a none too subtle attempt to caution the Japanese central bank from raising rates at the next monetary policy meeting in September.
So with a BoJ which is being urged not to be precipitate in raising rates, and an economy minister who is stressing that government spending won't be the safety net which saves the Japanese economy, can we draw the conclusion that - in intentions at least - the current priority is going to be to try and do something about Japan's huge accumulated government debt?