¥30 tril new stimulus eyed as Japan fights inflation, weak yen

"Japan and new stimulus."

Really how many times have we seen these headlines over the last 33 years.

How much of each every one of those stimuli has disappeared down the throat of Japan Inc is truly mind-blowing.

The fact that they are still doing it with the locals lapping it up speaks volumes about the education system in Japan.

Truly an end game waiting to happen.

What a ridiculous headline - print more money to reduce inflation and strengthen yen? If the author believes this stuff, no wonder the markets are behaving so ridiculously.....

Another corporate handout….. if the jgov insists on more massive handouts… they should give it to the people! Let the masses decide which businesses deserve their money …

Fighting fire with gasoline

Economics 101: inserting more cash into an economy with soaring inflation will make matters worse.

That would be true if inflation's cause were internal demand. This is external, similar to 1970s America's stagflation. Given the average Taro's reluctance to spend, most of the "stimulus" will likely be banked.

If targeted to those who really need it, though (say, couples with an income under ¥3 million, more for those with children), it would work as a cushion. Just don't toss it out all willy nilly.

Also, the poor have a greater propensity to spend, and spending is the whole point of a stimulus.

Just cut the consumption tax, for crying out load. A much faster, easier and fairer solution.

Another nice payday for the boys at Dentsu.

I'm with Mr. McCarty above. It's taxpayer money - let the taxpayers spend it instead of doling it out to the LDP cabal of J-Inc.

Fighting inflation by printing more money is like putting out a fire with gasoline. But hey I won't say no to free beer money.

Another key feature would be to expand subsidies for small and midsize companies that raise pay, as Kishida attaches importance to wealth redistribution as part of his push for creating a new capitalism.

Still amazed at this oft repeated feature of "New Capitalism".

Companies that have been resistant to wage hikes through boom and bust.

But gifting these corporations with worker's tax money from the public treasury will finally spur them to pass on whatever wage hike the executives see fit to grant?

I am no fan of late stage capitalism, but I cannot fathom this is anything but kleptocracy worthy of countries Japan would see as at an early stage of "developing".

They are always going to do this and that whilst building up more and more debt.

Well, of course they are the ones parasitically skimming off the top of the churn at every turn.

And the next big outlay is to expand the defense budget through to 2027.

Aren’t politicians meant to work at improving relations internationally?

It appears that all they do is take and take!

Cash to the people and let them decide how they want to spend it, after all it's their cash to start with, so give it back to them.

While I agree with Laguna that this particular inflationary period is not due to domestic demand, inflation is still caused by demand for goods and services exceeding supply (mostly as a result of post-Covid demand and broken international supply chains - more on that in a momet) in an environment of excess liquidity.

So the obvious solution, in fact about the only solution available from a government policy perspective in the medium term is to raise interest rates and turn off the printing presses. But much like your body fighting a viral infection by raising your body temperature, doing so gives the economy the equivalent of a cold in the form of lower (possibly negative) growth and reduced employment (as we don't have enough live bodies to put into the jobs now, this might not be as bad as one would imagine.)

But nobody likes that and it is politically unpopular which is why central banks are supposed to be independent of poltical parties.

The longer-term solution is to embrace the opportunities that the Pandemic has brought us to bring supply chains back on shore - at least for critical goods and services.

I am a very strong backer of free trade and I believe that trade makes all countries better off AS LONG AS all countries are willing to play by the rules and not use mechantilism to put geo-political pressure on their competitor nations, steel technology that they cannot develop themselves or use critical resources as a weapon (Looking at you, former communist and current authoritarian dictatorships.)

In that case, giving an authoritarian dictatatorship a choke point on critical supply chains is like giving an abusinve spouse a cattle prod.

So we in Japan really should follow companies in America in on-shoring our critical supply chains which would provide better paying jobs, make our economies more resistant to presssure tactics and create more stable supply which would reduce inflationary pressures. But again, this is a longer term solution.

What is NOT a solution is pumping another 30 Trillion yen into an economy with excess liquidity to start with.

Free money

"Another key feature would be to expand subsidies for small and midsize companies that raise pay..."

Oh, jesus, here we go. Exactly what I said they'd do the other day. And when those companies don't raise pay? How many times does this have to fail for it to click with the government that it DOESN'T work??

Kuroda always repeats mechanically that additionnal monetary accommodation is necessary because inflation will fall back below the 2% target next year.

Well he’d better look at what happened in the US and Europe where central bankers initially said that inflation was transitory and is now out of control.

If the same happens here he will have no excuse.

He is an ideologue unable to adapt to reality.

Russia's war against Ukraine has increased energy, raw material and food prices.

Its a pure lie.

You did because of antirussian sanctions in name of US interests.So congrats to "genuises"...

So they're just going to print more money and give it to businesses? Who saw that coming?

Cut consumption tax for food at the least. That would help the average Joe immensely.

Keynesian economics at its worst.

All this will do is to boost the stock prices for those who can invest.

30 Trillion yen would be 240,000¥ per resident… give it to the people to spend .

yup, more unfunded keynesian trickle down….

"The problem is that we haven't seen wage growth (to keep pace with price hikes)," Kishida told a parliamentary session on Tuesday

Well, yeah. What is your plan Kishida-san? We keep hearing this plan of yours but do not understand the outline of what you intend to do to achieve this goal. Right now it just seems like you are waiting for something to happen rather than taking action.

The Yen is normal. It is not weak. It been over value since turning off the nuclear power and having to import more energy to take up void. Want a stronger yen go nuclear. 30 Trillion will only elevate the yen until the cold hits then it will normalise back to where it is today.

Economics 101: inserting more cash into an economy with soaring inflation will make matters worse.

obviously these so called experts have no idea.

these free cash handouts are what caused inflation in the first place.

Cut consumption tax for food at the least. That would help the average Joe immensely.

Very good idea, Jayei. In my native California, there is not tax on non-prepared food - that is, restaurant meals are taxed, but food from a supermarket is not. Being somewhat long in the tooth an with my children gone, most all of our expenditure is on supermarket food (and beer).