Economic policy

Factbox: Main economic policy positions of the next candidates for the Japanese Prime Minister

TOKYO, Sept 7 (Reuters) – Japanese Prime Minister Yoshihide Suga, whose endorsement notes are in tatters ahead of the general election, said last week he would step down, setting the stage for his replacement as prime minister and increasing uncertainty about the outlook for economic policy. .

Below are the main economic policy views of the candidates to become Japan’s next prime minister.

FUMIO KISHIDA

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A former foreign minister with a background as a banker, Kishida had previously said that if he became leader of the ruling party, fiscal consolidation would be a major policy pillar.

He also expressed doubts over the Bank of Japan’s prolonged ultra-loose monetary policy, saying that in 2018 the current stimulus cannot last forever.

As the economy suffers from the shock of the COVID-19 pandemic, Kishida told a magazine on Monday that the BOJ must maintain its 2% inflation target and ultra-loose monetary policy. He also said Japan needed a fiscal stimulus package of more than 30 trillion yen ($273 billion). Read more

Kishida’s economic position differs somewhat from that of Suga, who took over much of the “Abenomics” stimulus policies from his predecessor Shinzo Abe.

At a recent press conference, Kishida said Japan cannot solve structural problems simply by sustaining growth, distancing itself from Abenomics which sought to fix Japan’s tattered finances by achieving high growth and increasing tax revenues.

Kishida also underscored the need to distribute more wealth to households, contrary to Abenomics’ focus on increasing corporate profits in the hope that profits will eventually trickle down to wage earners.

SANAE TAKAICHI

A former home affairs minister and close associate of Abe, Takaichi said she would stick with a revamped version of “Abenomics” that included bold monetary easing.

In a recent interview with national media, Takaichi said Japan should freeze a balanced budget target until inflation reaches the central bank’s 2% target, so that fiscal and monetary policies remain expansionary.

She also said Japan should issue more government bonds to fund investment in growth areas because it “doesn’t have to worry about defaulting on its debt” given the current low borrowing costs and the central bank’s ability to continue printing money.

TARO KONO

After serving as minister in charge of administrative reform and deregulation, Kono called for cutting wasteful spending in areas such as Japan’s soaring medical costs. On its website, it also offers to accept foreign workers to address a chronic labor shortage caused by a rapidly aging population.

As head of a ruling party panel on administrative reform in 2017, Kono urged the BOJ to more clearly communicate an exit strategy from an ultra-loose policy. He said the longer the BOJ continues to expand its balance sheet, “the harder it would be to get out.”

SHIGRU-ISHIBA

A former defense minister and rival to Abe, Ishiba has been a strong critic of Abenomics, saying the policies have enriched shareholders by supporting stock prices, but brought little benefit to workers.

He also criticized the BOJ’s ultra-low interest rates for hurting regional banks and called for more public works spending to address growing inequality.

In an interview with Reuters last year, Ishiba said Japan’s fiscal and monetary stimulus had become so large that its withdrawal could destabilize the economy.

He keeps his distance from big-spending supporters. In the interview, Ishiba expressed caution about cutting Japan’s sales tax or offering lump sum payments, saying any aid should be targeted to households and small businesses hardest hit by the pandemic. pandemic.

($1 = 109.7600 yen)

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Reporting by Leika Kihara, Tetsushi Kajimoto, Daniel Leussink and Kantaro Komiya; Editing by Sam Holmes

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