Japan to compile economic package to ease inflation pain

By Satoshi Sugiyama and Tetsushi Kajimoto

TOKYO (Reuters) -Japan’s Prime Minister Fumio Kishida unveiled on Monday the pillars of a new economic stimulus package to be compiled next month to help households ease the pain of price hikes and boost wages.

Kishida will instruct his cabinet on Tuesday to put together the package and swiftly set up an extra budget to fund it, he said.

It will include measures to protect people from cost-push inflation, back sustainable wage and income growth, promote domestic investment to spur growth, reform to overcome dwindling populations, and encourage infrastructure investment.

With the new economic measures, the premier pledged to shift Japan’s economy, which has tended to focus on cost cutting, away from such practices.

Kishida also warned investors trying to sell off the yen, which will boost import bills for food and energy, saying he was closely watching currency moves with a high sense of urgency.

“It’s important for currencies to move stably reflecting fundamentals,” Kishida said in his rare remarks on the foreign exchange market. “Excessive volatility is undesirable.”

The size and substance of the extra budget remains unclear.

When asked about the chance of dissolving parliament’s lower house to call a snap election, Kishida said he was not thinking about such an option as he must now focus on the new stimulus and other issues that cannot wait.

Source link