GROWTH BUTTON
On the economy, Takaichi insisted that her fiscal policies will not be “reckless”, as investors worry that her efforts to boost growth and help consumers with inflation will swell Japan’s debts.
“We are not going to pursue a reckless fiscal policy that would undermine the market’s confidence,” Takaichi told parliament, undertaking to reduce Japan’s ratio of debt to gross domestic product.
“I will keep hitting that growth switch – again and again and again – pushing it as much as I possibly can,” she said.
She pledged to promote domestic investment in “risk management” areas such as energy, health, infrastructure and cybersecurity.
In addition, her government would focus on “growth” areas such as AI, chips and ship-building.
Japanese inflation slowed in January, government data showed earlier Friday, in welcome news for Takaichi.
Soaring inflation in Asia’s number-two economy – after decades of flat or falling prices – contributed to the downfall of Takaichi’s two predecessors and Japan’s first woman premier has made helping households a priority.
Excluding fresh food, “core” consumer prices rose 2.0 per cent year-on-year, the slowest rise in two years, down from 2.4 per cent in December, and in line with market forecasts.
In the address, Takaichi repeated her campaign pledge to consider suspending consumption tax on food for two years to help households cope with inflation.
This has exacerbated market worries about Japan’s Godzilla-sized debts, with yields on long-dated government bonds hitting record highs last month.
She also announced in her policy speech a cross-party “national council” to discuss taxation and how to fund ageing Japan’s ballooning social security bill.
In addition, Takaichi said she wanted to “make maximum use of decarbonised power sources” to ensure energy security.
“Ensuring domestically produced energy is important from the viewpoint of energy security,” Takaichi said.
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