TOKYO, JAPAN – OCTOBER 1: Japan's new Prime Minister Shigeru Ishiba attends a press conference at the Prime Minister's Residence on October 1, 2024 in Tokyo, Japan.
Yuichi Yamazaki | Getty Images News | Getty Images
Japanese Prime Minister Shigeru Ishiba said he had asked ministers to develop an economic rescue plan to ease the impact of inflation.
“We need to provide support for people currently suffering from rising costs until a positive growth cycle is established in which wage growth exceeds inflation and drives capital spending,” Ishiba said in his first policy speech to parliament as Japan's prime minister on Friday. Translated by Reuters.
Local media reported earlier that Ishiba also plans to prepare a supplementary budget to fund relief plans after the October 27 House of Representatives election.
In his speech, Ishiba said support measures would include subsidies for low-income households and significantly increased subsidies to local governments.
On Monday, just three days after being elected leader of Japan's ruling party, the new prime minister set a date for snap elections. The election for the lower house of parliament is about to be held One year before expiration.
Ishiba was constantly questioned during his speech on Friday.
In his speech, Japan achieved Nikkei 225 Index narrowed to 0.09%, while the Topix gained 0.36%. benchmark Japan 10-year government bond yield up 0.013 basis points. When bond prices fall, yields rise.
this yen It strengthened further against the US dollar around 146.01.
The former defense minister won a tight leadership race last week and was confirmed as prime minister by parliament on Tuesday. He now faces the daunting task of steering the economy out of years of stagnation and into a precarious transition.
With inflation reaching its 2% target, the Bank of Japan has initiated actions to normalize monetary policy. But the problem for policymakers is that citizens are no longer used to rising prices after years of deflationary pressures.
The Japanese government has sought to cut energy subsidies, Oppose its decarbonization efforts As the country continues to rely on fossil fuel imports. but it Extend subsidies As the country sees it, the program was set to expire in May Record high temperatures this summer A weak yen makes energy imports more expensive. Those extended subsidies are set to expire this month.
Ishiba vowed during the campaign: Reduce family burden Suffering from rising cost of living and exhibiting Promote rural revitalizationrural Japan is suffering from a broader demographic crisis and an aging population.
The 67-year-old veteran politician appointed a group of rivals and allies to his cabinet on Tuesday in a bid to bring political reform to the Liberal Democratic Party. The ruling party has been plagued by corruption scandals that have divided the party.
Ishiba has long been critical of former Prime Minister Shinzo Abe and his legacy of “Abenomics”, usually defined as structural economic reforms such as loose monetary policy, fiscal stimulus and tax cuts.
On the eve of the election, he expressed support for tax increases, agreed with the Bank of Japan's policy of steadily raising interest rates, and expressed concern about the continued depreciation of the yen.
But on Wednesday, he told reporters that current economic conditions did not support further interest rate increases. The yen weakened, posting its largest one-day drop since June 2022.