Japan PM vows to combat rising utility bills, benefit from weak yen

FILE PHOTO: Japan’s Prime Minister Fumio Kishida walks on stage during the state funeral of former Japanese Prime Minister Shinzo Abe at Nippon Budokan in Tokyo, Japan, 27 September 2022. Thousands of people are gathered in Tokyo to attend the state funeral for former prime minister Shinzo Abe, including foreign dignitaries and representatives from more than 200 countries and international organizations. FRANCK ROBICHON/Pool via REUTERS

By Leika Kihara

TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida on Monday vowed to take steps to cushion the blow from rising electricity bills and maximise the benefits to the economy from a weak yen such as by resuscitating inbound tourism.

Dealing with rising inflation and the fallout from the yen’s recent sharp falls will be among steps the administration will focus on, Kishida said in a policy speech to parliament, stressing that revitalising the economy was his “top priority.”

“A big challenge Japan will face toward next spring is the risk of a sharp rise in electricity bills. We will take unprecedented, bold measures that directly ease the burden on households and companies,” Kishida said.

The government will compile a package of measures by the end of this month to “protect people’s livelihood from rising prices”, he said.

Kishida also said Japan will fully open borders to overseas visitors from Oct. 11 to revitalise inbound tourism, which had ground to a halt due to entry restrictions imposed to deal with the COVID-19 pandemic.

“We will powerfully pursue policy measures to maximise the benefits of a weak yen,” with a target of having foreign tourists spend over 5 trillion yen ($35 billion) in Japan annually, he said.

Attracting chip and battery plants, and promoting exports of agriculture products would also be among steps Japan would take to benefit from the weak yen, Kishida said.

Kishida’s administration is under pressure to take measures to cushion the economic blow from the weak yen, which boosts exporters’ profits but hurts households by inflating the cost of importing already expensive fuel and raw material prices.

Japan intervened in the foreign exchange market on Sept. 22 to buy yen for the first time since 1998, in an attempt to shore up the battered currency after the central bank stuck with ultra-low interest rates.

($1 = 144.7500 yen)

(Reporting by Leika Kihara; Editing by Ana Nicolaci da Costa)

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