Japan vows to achieve wage-driven growth in draft policy blueprint
TOKYO (Kyodo) -- The Japanese government has pledged to pursue economic growth driven by sustainable wage hikes, aiming to nearly double gross domestic product by around 2040, according to a draft policy blueprint unveiled Friday.
Facing uncertainty from higher U.S. tariffs and prolonged inflation weighing on household spending, Prime Minister Shigeru Ishiba's government vowed in its draft economic and fiscal policy plan to achieve wage increases that outpace rising prices.
The blueprint, whose draft was presented to the Council on Economic and Fiscal Policy on Friday, is set to be finalized next week. Once adopted, it will serve as the basis for the government's budget and tax reform proposals for the next fiscal year.
Amid mounting concern about Japan's fiscal health, the worst among advanced economies, the Ishiba administration will continue striving to maintain market confidence, the draft said, with interest rates on longer-term government bonds on an upward trend.
But the timeline for attaining a surplus in the primary balance -- annual tax and nontax revenues minus spending other than debt-servicing costs -- was pushed back from fiscal 2025 to sometime between that year and fiscal 2026 through March 2027.
On the U.S. tariffs under President Donald Trump, the draft said the levies pose downside risks to Japan's export-reliant economy, as they could eventually dampen corporate and consumer sentiment, dragging down consumption and investment.
While negotiations are ongoing to urge the United States to review its trade policies, the Japanese government will implement measures to mitigate the negative impact on the broader economy, including support for corporate financing, the draft said.
As the country's working-age population is shrinking, the government promised to secure economic growth of about 3 percent, which would lead to GDP of 1,000 trillion yen ($7 trillion) by around 2040, up from its current level of 600 trillion yen.
To steadily deliver annual inflation-adjusted wage expansion of around 1 percent across Japan, the government said it will shore up small and mid-sized companies by helping them pass rising costs on to clients and strengthen their business foundations.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Japan Today
an hour ago
- Japan Today
Ishiba refrains from saying if Japan supports U.S. attacks on Iran
In this image taken from a video, a passerby holds a special edition of a newspaper in Tokyo on Sunday. The headline reads "U.S. attacks Iran's nuclear sites." Japanese Prime Minister Shigeru Ishiba said Sunday Japan is following developments in Iran "with grave concern" after the United States attacked nuclear facilities in the Middle East nation, but he refrained from commenting whether Tokyo supports the attacks by its security ally. Ishiba also told reporters after being briefed on the latest development that de-escalating the situation is "the most important." While no impact on energy supplies has been confirmed so far, Ishiba said he instructed officials to monitor the situation with a sense of urgency and take all necessary measures. Resource-scarce Japan relies heavily on the Middle East for crude oil. As the direct involvement of the United States raised tensions further in the Middle East, another batch of Japanese nationals and their family members were evacuated from Iran, following a group that arrived in neighboring Azerbaijan early Friday. According to the Foreign Ministry, a total of 21 Japanese nationals and their family members had evacuated from Iran to Azerbaijan by bus, with none of them having any health issues. Their departure came after 87 Japanese nationals and their family members departed from Iran and Israel last week. Israel and Iran have engaged in tit-for-tat strikes since the former attacked Iranian nuclear facilities and military targets last week. Israel claims that Iran is close to obtaining a nuclear weapon, which the latter denies. Following the evacuations, around 200 Japanese nationals are still in Iran, while around 1,000 remain in Israel, according to the ministry. © KYODO
an hour ago
Ishiba Calls for Calming Down Situation Regarding Iran
News from Japan Politics Jun 22, 2025 16:17 (JST) Tokyo, June 22 (Jiji Press)--Japanese Prime Minister Shigeru Ishiba on Sunday called for calming down the situation regarding Iran, following the United States' airstrikes on nuclear sites in the Middle Eastern country. "It's paramount to calm the situation down soon," Ishiba told reporters at the prime minister's office in Tokyo. "Iran's nuclear development must be blocked," he added. When asked whether Japan supports the U.S. attacks, Ishiba said only that his government will fully discuss it. The prime minister also said he has instructed relevant government bodies to take every measure to ensure the safety of Japanese citizens in the Middle East. END [Copyright The Jiji Press, Ltd.] Jiji Press
Japan Times
an hour ago
- Japan Times
Tokyo votes in local election seen as key test for ruling party
Voting kicked off Sunday for the Tokyo metropolitan assembly, a poll seen as a key barometer of public sentiment towards the central government, which has been struggling with low approval ratings. Prime Minister Shigeru Ishiba's Liberal Democratic Party — its popularity battered by surging inflation and high rice prices — hopes to retain its position as the largest party in the mega-city's legislature. "We will do everything ... to get everyone elected," Ishiba told reporters earlier this month when campaigning kicked off, claiming his party was best positioned to resolve local issues affecting Tokyo's some 14 million residents. The Tokyo assembly election is being watched closely as it comes just weeks before elections for the country's Upper House, which local media has reported could take place on July 20. Ishiba is seeking to maintain his coalition's majority, having already lost a majority in Lower House elections last October. Local media have speculated that another blow in the polls could lead to a change of party leadership. For months, public support for Ishiba, who took office in October, has been at rock bottom, thanks in part to rising inflation and soaring rice costs on his watch. Polls this month showed a slight uptick in support, thanks in part to new policies to tackle the rice price issue. Polling stations for the Tokyo metropolitan assembly will close at 8:00 pm. A record 295 candidates were running in Sunday's election — the most since 1997— including 99 female candidates, the highest proportion ever, which officials have hailed as a "delightful trend." Japan remained at 118th place out of 148 countries in the World Economic Forum's Global Gender Gap Index ranking this year, as women's participation in politics was particularly low.
