Institution: Concerns about Japan's fiscal expansion exacerbating inflation seem excessive

Two economists from Morgan Stanley and Mitsubishi UFJ Securities stated in a research report that investors' concerns about the potential for increased inflation in Japan due to large-scale fiscal expansion under the leadership of new Prime Minister Sanna Takashima seem excessive. The economists noted, "The Takashima cabinet is likely to focus on implementing policies that have been clearly agreed upon with the Japan Restoration Party." They expect that clearly agreed measures, such as the legislation to abolish the temporary gasoline tax rate, will proceed as planned. They added, "In contrast, for policy items that are still under review, with unclear details and implementation timelines, a prudent approach may be to lower expectations for their near-term execution."