Last Friday (December 5, 2025), I filmed an extended discussion with my Kyoto University colleague, Professor Fujii about a range of issues concerning the Japanese and Global economy. Once it is edited, the video will be available on YouTube. Fujii-sensei is advising the new Japanese Prime Minister and is the author of the ‘Responsible proactive fiscal policy’ slogan that is summarising the shift within the Japanese government from the Ishiba Cabinet and their austerity mindset to the new Takaichi Cabinet and its desire to introduce renewed fiscal expansion. Among the topics discussed where my conjecture that Japan is caught in a vicious cycle of secular stagnation and requires a large fiscal shock to alter the deflationary mindset that has crippled the economy over several decades, the need for tariffs to protect Japanese industry to advance food security (in the fact of major rice shortages in the last year or two), whether Japan should participate in Plaza Accord 2.0 (aka Mar-a-Lago Acccord) that Trump is demanding the China accept, and policy structures that are necessary to reallocate labour from areas of excess (gig economy) to sectors where shortages and bottlenecks are present (for example, Construction) – which is essential if the proposed fiscal expansion is to stimulate production rather than prices. For the purposes of this blog post though, we also discussed the validity of fiscal expansion within the context of the yen. Mainstream economists keep arguing that the expansion is not viable given the depreciation of the yen, which they claim has been inflationary. It is a standard argument and I mentioned it in this recent blog post – Panel of Japanese economists mired in erroneous mainstream constructions and logic (November 27, 2025). I consider that issue more today.