According to the Wisdom Financial APP, on October 4th local time, Japan's newly appointed Prime Minister Shigeru Ishiba delivered a speech at the House of Representatives of the Japanese Parliament after taking office as Prime Minister. In his speech, Shigeru Ishiba emphasized that his primary economic task is to defeat deflation and lead the country into a stable growth trajectory.

Shigeru Ishiba stated in his speech: "I will decisively end deflation and build a future for our economy." These remarks largely emphasize the policy position he put forward during the campaign for the presidency of the ruling Liberal Democratic Party, marking continuity with the previous administration.

Shigeru Ishiba stated that he will seek to increase wages, boost productivity, support the revitalization of rural areas, and by continuing to encourage the shift from private savings to investment, turn Japan into an "investment powerhouse." Additionally, to aid vulnerable groups and promote economic growth, Ishiba stated that he would use government spending when appropriate, while also pledging to improve the country's battered balance sheet.

Earlier on Friday, Shigeru Ishiba instructed the cabinet to develop a comprehensive spending plan, including measures to help low-income families cope with rising prices of essentials such as rice and fuel. The outline of the plan envisions a coordinated three-year window to eradicate deflation, indicating that the Japanese government does not expect to end deflation in the short term.

It is worth mentioning that on Wednesday, Shigeru Ishiba stated that the Japanese economy is not yet ready for another rate hike by the Bank of Japan. That day, Ishiba held talks with Bank of Japan Governor Haruhiko Kuroda. After the meeting, Ishiba told the media: "I don't think the current environment is right for further rate hikes. I told the Governor that I hope the economy can end deflation sustainably under loose monetary policy."

On the same day, Shigeru Ishiba's confidant and Japan's newly appointed Minister of Economic and Fiscal Policy and Rebirth, Akira Amari, also mentioned his cautious stance on further rate hikes by the Bank of Japan. Although the current policy rate of 0.25% is "abnormal by global standards," the primary goal is to "escape deflation." The new Finance Minister, Katsunobu Kato, also adopted a cautious stance when asked about the Bank of Japan, reiterating the view that overcoming deflation should be the primary goal, stating, "I hope the Bank can appropriately implement monetary policy to achieve a stable 2% inflation target. Furthermore, I hope the Bank can engage in cautious communication with the markets."

Shigeru Ishiba's statement on Wednesday triggered a sharp drop in the yen. Prior to becoming Japan's new Prime Minister, Ishiba had expressed support for the normalization process of the Bank of Japan's policies to help support the weak yen, leading some market participants to believe that he would support the Bank in continuing with rate hikes.

However, Shigeru Ishiba quickly 'made up for it' on Thursday. He expressed on Thursday that he agrees with the views of the Governor of the Bank of Japan, Haruhiko Kuroda, that there is time to assess the market and economic situation before adjusting interest rates. Ishiba pointed out that Kuroda explained the day before in a meeting that the monetary environment is still very loose, and the Bank of Japan has enough time to evaluate the impact of policies before making any adjustments. Ishiba said, 'This is also my understanding.'

Editor/ping