TOKYO – Japan‘s former foreign minister Fumio Kishida, a strong contender to become next prime minister, has called for a package of more than 30 trillion yen ($273 billion) to cushion the blow from the coronavirus pandemic, a magazine reported.
Mr. Suga’s shock Friday announcement he was stepping down has thrown a ruling Liberal Democratic Party (LDP) leadership race set for Sept. 29 wide open, with an array of candidates considering running.
Mr. Kishida, 64, is the only candidate to formally announce his candidacy for the leadership so far.
Mr. Kishida told Diamond magazine that if he were to become prime minister, he would have the Bank of Japan maintain its 2% inflation target and massive stimulus programme.
“We can’t touch it for the time being. Removing the goal could send the wrong message to markets,” Mr. Kishida said on the BOJ’s price target, which critics say is unrealistic for an economy long suffering from near-zero inflation.
“We must support the economy with large-scale monetary easing and fiscal stimulus to protect people’s lives from the pandemic,” he was quoted as saying in an interview that ran on Monday evening.
The remarks came after Mr. Kishida told a news conference last Friday that the government must compile a spending package worth “several tens of trillions yen,” without giving a specific number.
Mr. Kishida said under his plan, the government would compile a supplementary budget exceeding 30 trillion yen that will be funded by issuing bonds, according to the magazine.
“Mr. Kishida is stressing the need for a short-term, targeted package, a view seen shared by another strong candidate Taro Kono,” said Chotaro Morita, a strategist at SMBC Nikko Securities, adding 30 trillion yen will be the ballpark number for any new stimulus regardless of who becomes next premier.
Kono, Japan‘s minister in charge of fighting COVID-19, has yet to formally declare his candidacy but has emerged as the top choice of voters according to two opinion polls.
Sanae Takaichi, who is also expressing interest in running and has the backing of former prime minister Shinzo Abe, has called for freezing a target for balancing the budget until the BOJ’s 2% inflation target is met.
Finance Minister Taro Aso declined to comment on Kishida‘s call for a stimulus package, but said he will consider compiling the budget for the year starting next April “with focus on digital, green, regional revival and ageing population.” – Reuters