Katayama’s comments may ease some of the political risk flagged in today’s Reuters poll, where most economists warned that dissent from government-nominated BOJ board members could weigh on the yen. Her description of an economy close to wage-driven inflation is language that supports the case for further tightening, which would tend to support the yen and keep upward pressure on short-dated JGB yields. Her reference to import-driven price rises also keeps oil in focus, with energy costs tied to the Middle East conflict a direct driver of Japan’s inflation. The tension between consumption tax cuts and BOJ tightening remains, and markets may test her “no gap” message against how board members vote at the next hike.- Katayama’s message was that fiscal support and monetary tightening can coexist, but the real test of “no gap” will come when the BOJ next votes.Summary:Finance Minister Satsuki Katayama said Japan is seeing price rises driven by higher import costsShe said the economy is on the cusp of a shift to sustained inflation driven by rising wagesThe planned consumption tax cut and payouts are aimed at cushioning households from rising living costs, she told parliamentAsked whether the tax cut could conflict with BOJ rate hikes, she said the government and BOJ are exchanging views and she sees no gap between themThe comments come as most economists expect the BOJ to raise rates to 1.50% in DecemberJapan’s Finance Minister Satsuki Katayama said on Wednesday that the economy is on the cusp of a shift to sustained inflation driven by rising wages, and that she sees no gap between the government’s views and those of the Bank of Japan.Speaking in parliament, Katayama said Japan is currently experiencing price rises driven largely by higher import costs. She said the economy is close to moving into a period where inflation is sustained by wage growth, a transition the BOJ has long described as a condition for normalising monetary policy.Katayama said the government’s planned consumption tax cut and household payouts are intended to cushion the impact of rising living costs. Asked by a lawmaker whether the tax cut could work against the central bank’s efforts to tame inflation through rate hikes, she said the government and the BOJ are exchanging views on various fronts and that she sees no gap between their positions.The question reflects a tension markets have been watching closely. Fiscal measures that support household spending can add to demand at a time when the BOJ is tightening policy, and investors have been alert to signs of political resistance to further rate rises. In September, two board members nominated by Prime Minister Sanae Takaichi’s government voted against the decision to raise rates to 1.25%, briefly weakening the yen.A Reuters poll published on Wednesday found most economists expect the BOJ to raise its policy rate to 1.50% in December, keeping up a quarterly pace of increases. Nearly three-quarters said further dissenting votes at the next hike could weigh on the yen, which remains only modestly above its 2026 low.Katayama’s remarks may help reassure markets that the government is not pushing against tightening, although she did not explicitly endorse further rate rises. Import costs, including energy prices tied to the Middle East conflict, remain a key driver of the inflation she described.The BOJ’s next policy meeting ends on 30 October, when it will publish fresh growth and inflation forecasts. Attention will then shift to December, where the vote split may prove as important as the decision itself. This article was written by Eamonn Sheridan at investinglive.com.