TOKYO: Japan’s Prime Minister was expected yesterday to unveil growth strategies aimed at perking up the economy, the latest steps in a policy blitz that has rallied stocks and boosted his popularity.
Shinzo Abe will showcase his plans in a major press address as his controversial big-spending, easy-money policies – dubbed ‘Abenomics’ have fuelled optimism in an economy that has struggled for two decades.
The address came as Abe’s aides suggested economic reforms, including setting up special business districts with lowered corporate taxes and lighter regulation in a bid to attract foreign investors.
Abe was also expected to discuss employment measures for young people and women such as expanding the availability of day-care services to broaden Japan’s shrinking labour market, hit by retiring babyboomers and falling birthrate.
The expected measures will be the latest in Abe’s policy initiatives that have so far cheered investors and business sentiment.
The headline Nikkei index at the Tokyo Stock Exchange has soared nearly 50 per cent since he took the helm of the Liberal Democratic Party in September. The yen has plunged from 77.72 to the dollar to 98.45.
Many economists have warned that Abe’s policies were a risky gamble with no long-term certainty except for further worsening Tokyo’s already huge debt burden.
But intoxicating market rallies and the yen’s precipitous slide have found favour in the business community, forcing critics of Abenomics to the sidelines.
Since his December election victory Abe has surprised many with an economic pragmatism that has borne fruit, reversing his image as an out-of-touch nationalist from a political family.
His government pushed a US$142 billion stimulus, funded largely by issuing IOUs, despite Japan’s already having a pile of debt worth more than twice its GDP.
He appointed like-minded financial veteran Haruhiko Kuroda as chief central banker, whose aggressive monetary easing programme he hopes will work as the other side of a pincer movement and induce long-absent inflation. — AFP