TOKYO (Reuters) – Japan’s ruling party is ramping up calls for a new spending package worth at least 105 $1 billion Buffering the blow from rising inflation has fueled fears that the world’s third-largest economy will lag other economies in cutting massive fiscal support.
The package is worth at least 15 Toshimitsu Motegi, an official of the main ruling party of Kyodo News Agency, said that trillions of yen ($
billion dollars) to counter the headwinds of rising living costs and monetary tightening by the US and the European Central Bank
“We need a large, comprehensive package, ” Liberal Democratic Party (LDP) director-general Motegi said on Tuesday about the government’s expiring spending plans.
But another senior LDP official, Seko Hiroshige, estimated it would take at least twice that, or 15 trillion yen, he told a separate news release Yes, Kyodo added.
That figure echoes comments made last week by party policy chief Koichi Hagiuda.
Prime Minister Fumio Kishida, whose public support for the collapse of his cabinet in recent weeks, has faced pressure from the ruling coalition to take new steps to support his ratings and a fragile economy.
To fund spending, the government may submit a supplementary budget to parliament next month.
At a time when the Japanese economy is recovering from the trauma caused by the COVID-24 pandemic, it finds itself struggling with rising commodity prices and global growth Fight slowly.
The Bank of Japan has pledged to retain ultra-low interest rates to support the economy. But its dovish policy stance has pushed the yen to 24 year lows, pushing up the cost of food and fuel imports and putting more pressure on households and businesses.
Natsuo Yamaguchi, head of the Komeito party, a coalition partner of the Liberal Democratic Party, said policymakers must be mindful of the impact a rapid swing in the yen could have on livelihoods.
“The yen is depreciating much faster than before, which is said to be driven by interest rate policies in Japan and the United States,” Yamaguchi said at the briefing.
Japan’s core consumer inflation accelerated to 2.8% in August, the fastest annual pace in nearly eight years, surpassing the central bank by 2% for the fifth straight month on rising raw material prices and a weaker yen The goal.
The Bank of Japan is set to maintain ultra-low interest rates and a dovish stance at a two-day meeting that ends on Thursday, just as the U.S. central bank expects a sharp A few hours after the rate hike could spark a fresh sell-off in the yen.