More than two-thirds of Japanese companies support Prime Minister Sanae Takaichi’s economic policies, according to a Reuters survey, highlighting strong corporate backing for the government’s push to increase investment in AI, semiconductors and other high-growth industries.
The survey found that 68% of respondents approve of Takaichi’s economic policies, including 7% who strongly approve and 61% who somewhat approve. Meanwhile, 30% said they did not view the policies favourably.
Proactive Investment Is the Most Popular Policy
Among companies supporting Takaichi’s policies, 70% selected her growth strategy focused on proactive investment as their preferred measure.
The government’s economic blueprint, compiled in July, calls for greater cooperation between the public and private sectors to direct resources toward strategic industries. Combined public and private investment is projected to exceed 370 trillion yen ($2.4 trillion) through fiscal 2040.
Another 49% of supportive respondents selected energy subsidies and other measures aimed at combating inflation.
Food Sales-Tax Cut Faces Opposition
Takaichi’s proposal to reduce the sales tax on food from 8% to 1% for two years received significant opposition among companies that do not support her broader economic policies.
Among these respondents, 68% selected the food-tax reduction as a measure they did not support.
Critics argued that the tax cut could increase Japan’s national debt and weaken the yen, potentially raising crude-oil and fuel costs and offsetting some of the benefits of lower food taxes.
Takaichi has said the government intends to avoid relying on additional deficit-financing bonds to fund the proposed tax reduction.
46% Want Takaichi to Stay Beyond Her Current Term
The survey also showed relatively strong support for Takaichi remaining in office beyond her current term.
| View on Takaichi’s Tenure | Share |
|---|---|
| Want her to remain | 46% |
| Do not want her to remain | 18% |
| No clear preference | 36% |
Takaichi’s term as leader of the Liberal Democratic Party (LDP) is scheduled to end in September 2027.
Because the LDP holds a strong majority in Japan’s lower house, the winner of the party leadership election would be highly likely to become prime minister.
Japanese Firms Reveal Their Preferred Yen Levels
The survey also provided insight into companies’ preferred yen levels against the US dollar.
31% of respondents said they considered a USD/JPY range of 150 to 159.99 desirable, while 25% preferred 140 to 149.99 and 11% favoured 130 to 139.99.
| Preferred USD/JPY Range | Share |
|---|---|
| 150–159.99 | 31% |
| 140–149.99 | 25% |
| 130–139.99 | 11% |
The results highlight the importance of the yen’s exchange rate for Japanese companies, particularly as currency movements influence import costs, energy prices and corporate competitiveness.
BoJ Rate-Hike Expectations Support the Yen
The Japanese yen has strengthened sharply in recent sessions as expectations have increased that the Bank of Japan (BoJ) could accelerate its pace of interest-rate increases.
The yen was trading around 153.58 per dollar on Wednesday afternoon.
The central bank is widely expected to consider raising its policy rate to 1.25% from 1.00% at its September 17–18 meeting.
This monetary-policy outlook is an important factor for traders following Central Banks, particularly because higher Japanese interest rates can support the yen by reducing the interest-rate gap between Japan and other major economies.
What Takaichi’s Policies Could Mean for the Yen
Takaichi’s economic strategy creates competing forces for the Japanese currency.
Potentially Positive for JPY
- Higher BoJ interest rates.
- Stronger domestic investment.
- Greater productivity from AI and semiconductor investment.
- Stronger expectations for Japanese economic growth.
Potentially Negative for JPY
- Concerns over government debt.
- Expansionary fiscal policies.
- Additional inflationary pressure.
- Increased government spending.
The balance between fiscal expansion and tighter monetary policy could therefore remain important for the yen.
What the Survey Means for USD/JPY Traders
For forex markets, the key issue is how Takaichi’s fiscal strategy interacts with BoJ monetary policy.
A more aggressive BoJ could support the yen and put downward pressure on USD/JPY, while expansionary fiscal policy or concerns about rising government debt could work in the opposite direction.
Traders should therefore monitor upcoming Japanese economic releases and BoJ communication alongside broader dollar-market developments. Related developments can be followed through Market Analysis and Economic Calendar Events.
Key Takeaways for Forex Traders
📊 68% of surveyed Japanese firms approve of Takaichi’s economic policies.
🏭 70% of supportive companies favour her proactive investment strategy.
🇯🇵 46% want Takaichi to remain in office beyond her current term.
💴 31% consider USD/JPY between 150 and 159.99 desirable.
🏦 The BoJ is widely expected to consider raising its policy rate to 1.25% from 1.00%.
Conclusion
The Reuters survey shows broad support among Japanese companies for Sanae Takaichi’s economic policies, particularly her focus on proactive investment in strategic industries such as AI and semiconductors.
However, the government’s fiscal strategy remains controversial, with concerns that measures such as the proposed food sales-tax cut could increase debt and weaken the yen.
For forex traders, the interaction between Takaichi’s fiscal policies and the Bank of Japan’s interest-rate outlook will remain a key factor for the Japanese currency and USD/JPY. The upcoming September 17–18 BoJ meeting could provide an important test of whether expectations for higher Japanese rates continue to support the yen.
Frequently Asked Questions
Do Japanese companies support Takaichi’s economic policies?
Yes. 68% of surveyed companies said they approve of her economic policies.
What is Takaichi’s main economic strategy?
Her strategy focuses on proactive investment in strategic industries, including AI and semiconductors, to support long-term economic growth.
What percentage of firms support proactive investment?
Among companies that support Takaichi’s economic policies, 70% selected proactive investment as their preferred measure.
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