Japanese Prime Minister Sanae Takaichi described South Korea as an "important neighbor" and pledged to strengthen ties across a broad range of fields including security and the economy. On the economy, she reaffirmed a policy of "responsible expansionary fiscal management," saying Japan would pursue both a "strong economy" and "fiscal sustainability."
In a policy speech to an extraordinary session of parliament, Takaichi said Japan would "further strengthen relations with South Korea — an important neighboring country with which we have deepened communication through shuttle diplomacy — across a broad range of fields including security and the economy, and within frameworks that include Korea-U.S.-Japan cooperation," according to the Nihon Keizai Shimbun and other outlets on the 5th.
On relations with China, she also used the phrase "important neighboring country" while noting that "there are challenges, but also a long history of accumulated ties; building on that, we will comprehensively advance a mutually beneficial strategic relationship." She added that Japan would "assert what needs to be asserted regarding our country's position on issues in the East China Sea and South China Sea, military activity around Japan, coercive measures, the safety of Japanese nationals and human rights concerns, and will strongly demand responsible behavior."
Turning to North Korea, Takaichi said the "abductions issue is an ongoing humanitarian problem, and we will work toward its earliest possible resolution without ruling out any option, including a summit." She added that Japan "can never tolerate nuclear and missile development."
She also restated Japan's existing position on its territorial dispute with Russia. "The Northern Territories" — Japan's name for four islands in the Kuril chain that are under Russian control — "are inherently our country's territory both historically and under international law," she said. "Relations with Russia, which continues its invasion of Ukraine, are in a severe state, but we will carry through the government's policy of resolving the territorial issue and concluding a peace treaty."
On the economy and public finances, Takaichi laid out a plan to pursue aggressive growth investment alongside fiscal soundness. "What I have consistently pursued is keisei saimin," she said, referring to the idea of governing to relieve the people, while citing growth in households' take-home pay and fiscal sustainability. "Achieving both of these is precisely what responsible expansionary fiscal management means," she said.
To that end, the government will pursue growth investment targeting 17 strategic sectors and 62 products, and will draw up a "Japan Growth Strategy Implementation Plan" this year setting the direction for domestic investment over the next five years. The aim is to avoid delaying necessary investment while also improving the efficiency of fiscal spending.
As a core fiscal target, she proposed steadily lowering the combined outstanding debt of the central and local governments as a share of gross domestic product. "We will properly manage annual government bond issuance while comprehensively reviewing the economy, prices, tax revenue, interest rates, interest costs and market conditions," Takaichi said. "If the economy or markets move differently than expected, we will analyze the impact and respond nimbly."
