Japanese government publishes English booklet introducing economy and finance... “Assuaging overseas concerns”

(Tokyo = Yonhap News) Correspondent Jo Sung-mi = Local media reported that Japanese Prime Minister Sanae Takaichi, who is promoting economic growth through expansionary finances, has set out to quell foreign concerns about Japan's recent economic situation through an English pamphlet that mainly introduces the cabinet's economic and fiscal policies.

According to the Yomiuri Shimbun on the 14th, Takaichi's cabinet produced a 10-page pamphlet last month with the title of the Prime Minister's key slogan, "Strong and Rich Japan," changed to English.

In order to promote overseas investment in Japan, major economic policies, including 17 strategic growth areas, including artificial intelligence (AI) and semiconductors, which the Takaichi Cabinet is focusing on, were introduced.

The booklet contains Prime Minister Takaichi's message that the Japanese government's most important fiscal goal is "to stably reduce the ratio of debt balance to gross domestic product (GDP)," and appears to have focused on giving the message that the Japanese economy is "worthy of trust and investment" by including Japanese fiscal indicators and real wage trend graphs.

Yomiuri pointed out that the government plans to distribute this booklet during overseas trips of the prime minister or cabinet members or at government-hosted economic events, and that it appears to be intended to dispel concerns about Japan's recent financial deterioration.

Prime Minister Takaichi is being criticized for increasing market instability by not clarifying the financial resources required, which are estimated to be approximately 5 trillion yen (approximately 42.4 trillion won) per year, while promoting a temporary reduction in food consumption tax, a representative tax cut policy.

As the financial resources were not specified in the temporary reduction in food consumption tax recently passed at the Cabinet (State Council), there were a series of inquiries from the opposition party about securing financial resources at the Budget Committee of the House of Representatives (House of Representatives) of the National Assembly held the previous day.

Prime Minister Takaichi said he would not rely on issuance of deficit government bonds that would increase the national debt, and discussed using special accounts such as foreign exchange funds special account surplus.

Foreign exchange special accounting refers to a special accounting in which the government accumulates operating profits from dollar-denominated assets held in preparation for exchange rate intervention, etc.

The difference in interest rates from major countries such as the United States allows the Japanese government to purchase dollar-denominated assets cheaply, and against the backdrop of the recent weakening of the yen, it is expected that surpluses will increase as profits recorded in yen in the Japanese government's books when sold increase.

Prime Minister Takaichi said, “This year, there is non-tax revenue worth 9 trillion yen (approximately 76.3 trillion won), and among this, there are funds whose purpose has not been determined,” and indicated his intention to review it as a source of finance for cutting the consumption tax.

Takaichi's cabinet is pursuing measures to reduce the burden on households, such as lowering the food consumption tax rate from the current 8% to 1% for two years starting next year and preparing a salary support measure linked to income.

However, consumers' perceived prices are rising and consumer sentiment is shrinking.

According to the Lifestyle Consciousness Survey conducted by the Bank of Japan on adult consumers aged 20 or older every three months and released on the 13th, the proportion of people who responded that prices will rise significantly or somewhat higher five years from now reached 86.5%.

This is the highest level in about 19 years since December 2007.

54.4% of people responded that they could not afford anything, and more than 90% cited rising prices as the reason.

The corporate price index announced by the Bank of Japan on the same day rose 6.8% compared to the same month last year, and is expected to have an impact on future consumer price increases.