Report: The Japanese government will urge the central bank to maintain low interest rates to further stimulate the economy.
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The Japanese government is preparing to explicitly require the central bank in its economic stimulus package to focus its policy on achieving robust economic growth and price stability, highlighting new Prime Minister Sanae Takaichi’s desire for the Bank of Japan to maintain low interest rates to support a fragile economic recovery.
According to media reports on Monday, a draft framework of the stimulus package shows that the Japanese government plans to focus on alleviating the impact of rising living costs on households, investing in crisis management and growth sectors, as well as enhancing defense capabilities.
The draft emphasizes that monetary policy being directed toward achieving strong economic growth and price stability is “extremely important.” The government also promises to continue close coordination with the Bank of Japan to ensure Japan does not return to deflation and achieves sustained economic growth on the basis of price stability.
Nikkei reported on Sunday that Sanae Takaichi’s economic stimulus package will include tax cuts aimed at boosting investment around 17 key industries.
The stimulus package is expected to be finalized on November 21, marking the first significant economic initiative since Sanae Takaichi took office last month.
The finalization of the stimulus package will signify the formal shaping of policy direction under Prime Minister Sanae Takaichi’s government. As the new prime minister who just took office last month, this is her first major economic initiative and provides key insights for the market to observe the trajectory of Japan’s economic policy.
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