Saturday, October 16, 2021
HomeBusinessJapan's ruling party executive calls for $ 290 billion stimulus package By...

Japan’s ruling party executive calls for $ 290 billion stimulus package By Reuters

© Reuters. FILE PHOTO: Japan’s Minister of State in charge of revitalizing local economies, Kozo Yamamoto, speaks in Tokyo, Japan on August 3, 2016. REUTERS / Kim Kyung-Hoon

By Leika Kihara and Takaya Yamaguchi

TOKYO (Reuters) – Japan should compile an economic stimulus package worth at least 32-33 trillion yen ($ 282- $ 290 billion) to cushion the impact of the coronavirus pandemic, a senior party official said. ruler close to Prime Minister Fumio Kishida on Thursday.

Such large-scale spending would be necessary to fill Japan’s output gap and achieve the central bank’s 2% inflation target, said Kozo Yamamoto, architect of former Prime Minister Shinzo Abe’s “Abenomics” stimulus policies.

“The package can be financed by issuing Japanese government bonds (JGB),” said Yamamoto, now Kishida’s partner in economic policy. “The government should issue massive amounts of long-term JGB, which the central bank can buy aggressively.”

A former Finance Ministry official, Yamamoto has been deeply involved in the creation of Abenomics, a combination of massive fiscal and monetary stimulus and a growth strategy implemented in 2013 to lift Japan out of economic stagnation.

Kishida has said that he will maintain Abenomics’ stimulus policies and take additional steps to distribute wealth more broadly to households. The prime minister has also promised to compile a spending package worth “several tens of trillions of yen.”

“The important thing above all is to achieve strong economic growth with the three Abenomics arrows. Only then can we talk about redistribution, ”Yamamoto said, adding that he frequently exchanges emails with Kishida.

Although Japan should eventually raise taxes on capital gains and dividends to narrow the income gap, it will take at least until fiscal 2023 to establish the details, Yamamoto said.

Yamamoto, who has spearheaded the party’s proposals on financial matters, reiterated the need for Japan to act quickly to issue a central bank digital currency (CBDC).

That would require revising the law governing the Bank of Japan (BOJ), which would create an opportunity for other changes, such as adding job creation to the central bank’s mandate, he said.

“We need to hold the BOJ accountable for both price stability and job creation,” Yamamoto said.

Currently, the BOJ sets financial and price stability as its mandate, but not job growth.

($ 1 = 113.5300 yen)

Disclaimer: Fusion Media I would like to remind you that the data contained in this website is not necessarily real time or accurate. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges, but by market makers, so the prices may not be accurate and may differ from the actual market price, which means that prices are indicative and not appropriate for commercial purposes. Therefore, Fusion Media assumes no responsibility for any business losses you may incur as a result of the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any responsibility for loss or damage as a result of reliance on information, including data, quotes, charts, and buy / sell signals contained on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.



Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular