BOJ’s Ueda: Fiscal Spending May Curb Inflation by Expanding Supply

Ueda's framing is notable because it inverts the conventional assumption that fiscal expansion is inflationary, presenting supply-side capacity as the transmission channel. That distinction matters for how the BOJ's policy path is read alongside the government's spending stance, since the two are usually treated as pulling in opposite directions. The practical question is whether this supply-expansion channel is treated as a durable feature of the inflation outlook or a temporary offset—and whether markets and policymakers converge on the same reading as Japan's spending debate develops.