Japan's ruling party exec calls for 26t yen extra budget

Tokyo

JAPAN'S government is expected to compile an extra budget in October or November, senior ruling party lawmaker Kozo Yamamoto said on Wednesday, calling for spending of 26 trillion yen (S$316.29 billion) to cushion the economic blow from the Covid-19 pandemic.

Mr Yamamoto, a political heavyweight close to former Prime Minister Shinzo Abe, also urged the Bank of Japan (BOJ) to ramp up asset buying to weaken the yen further and help the export-reliant economy. "The BOJ must do more because Japan appears to be sliding back to deflation. Instead, the BOJ is stealth tapering asset purchases," Mr Yamamoto told Reuters in an interview.

"The BOJ should seek to weaken the yen more" by boosting government bond purchases and looking for new assets to buy such as municipal and foreign bonds, he said.

Mr Yamamoto called on the government to compile a 26-trillion-yen extra budget as soon as possible to pull the pandemic-hit economy out of the doldrums, a proposal he made at a party panel headed by Mr Abe.

That would come on top of a record budget worth almost one trillion yen for the current fiscal year, adding strains to Japan's already tattered finances. Mr Yamamoto said he submitted the proposal to Prime Minister Yoshihide Suga, but added that Parliament deliberations over an extra budget will likely have to wait until an expected lower house election in autumn. REUTERS

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL