Japan’s Chief Cabinet Secretary Yoshihide Suga, widely expected to become prime minister next week, said on Saturday he will consider topping up payouts to households and companies to cushion the economic blow from the COVID-19 pandemic deepens.
He also repeated that Japan must focus on reviving the economy before considering ways to fix its tattered finances, ruling out another increase in the national sales hike for another decade.
“If economic woes deepen, we will do whatever it takes and deploy further steps to protect jobs and businesses,” Suga said.
“Given current economic circumstances, the government will take such measures if necessary,” he said, when asked whether he would top up payouts to households and companies suffering from shrinking income due to the pandemic.
Suga made the remarks at a televised debate among candidates running in the ruling Liberal Democratic Party’s (LDP) leadership election on Monday to succeed Shinzo Abe as party chief. The winner is virtually assured to become prime minister because of the party’s parliamentary majority.
Shigeru Ishiba, another candidate in the race, said the Bank of Japan should not make any immediate changes to its ultra-easy monetary policy, as doing so would destabilise markets.
But he said the central bank should reexamine its policy framework in the long run to adapt to structural changes in Japan’s society, without elaborating.
“The BOJ’s biggest mandate is not to push up inflation but to maintain price stability. As such, it should stick to its 2% inflation target,” Ishiba said. “It shouldn’t rush in doing this, but a reexamination of its policy may be necessary.”
When asked about monetary policy, Suga replied: “My view is completely the same” as that of Ishiba.