Inflation has returned to Japan after decades of near-zero price growth, with consumer prices rising close to 3% – the fastest since the 1980s. The cost-of-living squeeze, driven by food prices, helped topple the previous administration and propel Sanae Takaichi to power as Japan's first female prime minister. Her pro-growth, big government stance promises fiscal stimulus, but risks complicating the Bank of Japan's efforts to contain sticky inflation.
Taro Kimura, Japan senior economist at Bloomberg Economics and Bank of Japan veteran, joins John on the Asia Centric podcast. He explains why inflation may be higher for longer and what Takaichi's policies mean for BOJ independence. He also covers the prime minister's remarks on Taiwan that sparked tension with Beijing, adding a geopolitical layer to Japan's economic challenges.
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