- Excessive fall in the yen could trigger unwanted inflation – Kono
- Japan needs deregulation to attract foreign investment – Kono
- Takaichi wants ‘bold’ fiscal stimulus backed by additional budget
TOKYO, Sept. 23 (Reuters) – The Japanese government and the central bank must work closely together to prevent the yen from falling, Taro Kono, the ruling party’s leadership contestant, said Thursday.
“If the market’s confidence in Japan’s finances is lost, it could trigger a fall in the yen,” Kono said. “If the yen falls, import costs will rise and cause inflation,” he said during an online debate between the running candidates.
“We must ensure that this does not happen through a sound macro-prudential policy. The government and the Bank of Japan must coordinate on economic and financial policy on this front,” said Kono, one of the leaders in the leadership race.
Kono also said that Japan needs to speed up deregulation to attract foreign investment and promote start-ups.
“Various regulations still hamper the entry of start-ups into the markets, so I would like to remove them. I would also like to increase foreign investment in Japan through deregulation, ”he said.
Sanae Takaichi, another candidate in the race, said if she were to become prime minister, she would craft a “big, bold fiscal stimulus” funded by a supplementary budget passed by parliament this year.
Kono and Takaichi are among four contenders for the Liberal Democratic Party (LDP) race on September 29. The race winner is almost certain to succeed Yoshihide Suga as the next prime minister of Japan, as the party has a majority in the lower house.
Reporting by Leika Kihara; Editing by Giles Elgood and Angus MacSwan
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