US Treasury Secretary Urges Japan To Move Beyond Abenomics Reflation Policies

US Treasury Secretary Scott Bessent has urged Japan to move beyond the reflationary policies associated with former Prime Minister Shinzo Abe, arguing that the Abenomics programme has achieved its central objective. Speaking after the G20 finance ministers’ meeting in Asheville, Bessent indicated that Japan should now focus on managing the economic consequences of its return to sustained inflation.

Bessent described Abenomics as a successful effort to pull Japan out of a prolonged period of disinflation. He credited the programme with helping restructure the corporate sector and reduce regulatory burdens on companies. According to Bessent, many of the economic reforms discussed during the G20 meeting had already been implemented in Japan through the policies pursued over the past decade.

The Treasury secretary’s remarks came in response to questions about Japan’s long-term interest rates, inflation and fiscal position. While noting that some discussions with Japanese officials were private, Bessent reiterated his view that Japan should allow the gains from its previous reforms to take hold rather than continuing efforts to stimulate inflation. He described the next stage of economic policy as “Takaichi Nomics”, without detailing specific fiscal or monetary measures.

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Bessent also portrayed Japan’s economic position as a significant turnaround from the pessimism surrounding the country more than a decade ago. He pointed to inflation approaching the Bank of Japan’s long-standing target as evidence that the reflationary objective had been achieved. In his view, Japan should now consider the broader consequences of having successfully moved away from its earlier period of persistent deflation.

The G20 chair’s statement also highlighted the importance of central bank independence, price stability and financial-system resilience. It called on governments to maintain fiscal sustainability, rebuild financial buffers and support investment that improves productivity. The statement also underlined the importance of a stable and predictable macroeconomic environment for economic growth and employment.

Abenomics was introduced after Abe returned as Japan’s prime minister in 2012, combining aggressive monetary easing, flexible fiscal policy and structural reforms to combat deflation and revive economic growth. The Bank of Japan maintained ultra-low interest rates and large-scale asset purchases for years under the framework. Japan’s return to sustained inflation has since placed greater focus on the pace of monetary normalisation and the need to balance price stability with continued economic growth.

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