Talking about the economic and monetary policies of Japanese female Prime Minister Hayao Takashi, and the return of "Abenomics"? The sharp rise in the Nikkei and the sharp drop in the Japanese yen exchange rate today were the first reactions of the market to the rise of Takashi Hayao: the market expected her to restart the economic agenda centered on large-scale fiscal stimulus and ultra loose monetary policy, which quickly ignited the Japanese stock market and triggered fluctuations in the foreign exchange market. In fact, what I am more concerned about is the impact of her economic and monetary policies on the global market. After all, a year ago, the Bank of Japan's interest rate hike combined with the significantly lower than expected large non farm payroll data in the United States triggered strong recession expectations, leading to a decline in interest rate trading and causing great impact on the market. Even now, the market still has stress trauma from the Bank of Japan's interest rate hike. If you carefully look at Takashi Hayao's campaign promises, she actually has a somewhat moderate stance compared to the strength of Abenomics. 1. Her campaign promise defines fiscal policy as' responsible expansionary fiscal policy '. The core is to use strategic fiscal mobilization to invest in areas that address social issues, thereby driving employment and income growth, ultimately achieving a natural increase in tax revenue. More importantly, the policy explicitly proposes to gradually reduce the government's net debt to GDP ratio. Does it have a bit of a shadow of the current US fiscal goal of reducing the debt to GDP ratio? 2. In terms of monetary policy proposals, although there is a moderate inclination towards a high market, Abe's shadow still lingers, and she strongly opposed interest rate hikes last year. This time, in order to stand in the middle of the election, the attitude towards interest rate hikes is still cautious. She previously made it clear that the government is responsible for setting fiscal and monetary policy goals, and the Bank of Japan is the institution that "determines the best means of monetary policy". But it also emphasizes the "government's responsibility" for financial policies and maintains a cautious attitude towards the Bank of Japan's (BOJ) interest rate hike, believing that it should not be hastily tightened. Her economic judgment is consistent with the cautious stance of Bank of Japan Governor Kazuo Ueda. Both of them hold a cautious view on the impact of US tariffs and believe that Japan's current inflation is mainly driven by supply side factors such as food prices. This is a good thing. If we look back at Japan's own inflation, we can actually see that since the beginning of this year, Japan's CPI has started to turn downwards, and the core CPI has also started to decline in the third quarter. In this situation, the pressure for the Bank of Japan to raise interest rates will be much smaller. 3. In terms of industrial policies: 1) High market forces advocate for expanding defense spending, and in fiscal year 27, defense related expenditures will be increased to 2% of GDP; 2) The plan is to promote investment in growth areas that are crucial to economic security through bold tax incentives, specifically naming artificial intelligence (AI), semiconductors, perovskites and solid-state batteries, digital technology, nuclear fusion, biotechnology, aerospace, shipbuilding, innovative drugs, etc; 3) Establish a "Foreign Investment Review Committee" to review inbound investments from the perspective of economic security; Is it obvious that Trump Besant also has a shadow on industrial policies. As discussed above, as Abe's prot é g é, it may be difficult for Gao Shi Zaomiao to fully replicate the qualitative easing of Abenomics. However, with a moderate attitude, Gao Shi will still pursue fiscal expansion by reducing taxes and burdens on businesses, driving economic growth. Fiscal expansion, coupled with inflation starting to decline, greatly reduces expectations for the Bank of Japan to raise interest rates. To be honest, after reading Gao Shi's policy proposals, I really feel that she has borrowed a lot from the Great Beauty Act. It has to be said that the two major economies of the United States and Japan have joined forces to embark on the path of fiscal dominance, and loose fiscal policies have become an important driving force for the increase in market risk appetite. The tweet about Fiscal Expansion 2.0 written in mid July at https://(x.com)/qinbafrank/status/1947143450492608947 is still worth taking a look.