Japan’s economic policy stands at a crossroads as Prime Minister Sanae Takaichi takes office, with the legacy of Abenomics challenged by shifting market and political realities.

The yen has halved against the dollar since 2012, superlong Japanese Government Bond (JGB) yields are at record highs, and demographic changes have reshaped demand for government bonds, setting the stage for a global debate on whether Japan’s new leadership can adapt its economic strategy to meet current challenges without causing instability at home or abroad.

In Episode 77 of The Flip Side podcast, Global Head of Research Brad Rogoff and Head of Japan FX & Rates Strategy Shinichiro Kadota analyse the credibility of Japan’s fiscal ambitions, the fragility of JGB supply-demand, and consider the impact of persistent inflation on the Bank of Japan’s rate path.