Cabinet OKs ¥29 tril spending plan to counter inflation

By keeping credit so cheap while the Fed is raising rates, the BOJ runs the risk of seeing the yen weaken further. The higher interest rates in the U.S. have led investors to dump other currencies, including the yen, for dollars, driving its value higher.

悪循環 or what is known as a vicious circle in English.

Cabinet OKs ¥29 tril spending plan to counter inflation

Japan new capitalism way to stop inflation, just poor more money to already have less valued yen into domestic economy.

"and encourage wage hikes"

This one small statement sums it up very well. As usual the money will be soaked up by corporations and misused by local governments. Noaki Average will get bugger all!

and encourage wage hikes,

Not sure why the govt and boj think that will happen. Back when Japan Inc. was raking in the biggest profits in its history, before the pandemic, it came out with all sorts of excuses to continue suppressing workers' wages.

Now, with the drastically worsened global situation, the authorities believe that Japan Inc. will start giving substantive pay raises?

Kuroda keeps saying that inflation is going to go down again once these destabalizing events like the war in Ukraine and Covid are over. First we have no idea when Russia will end hostilities in Ukraine, this could drag on for years, as well as China's zero Covid policy, so there is no way that things are going to become rosey and everything will return to normal. Also, does he think all of these producers are going to rush to cut prices that they have finally been able to raise after years of wanting to? I don't think so. He is just a stubborn old man, and many people believe that once he retires next March, the new head of the BOJ will at least bring interest rates back from negative!

Japan might end up needing some hyper inflation to be able to pay down the worlds largest debt. Seems to have a bottomless bank account or a money blossom tree somewhere.

Money printing to combat inflation. . .

They need to have the most carefully planned out directed stimulus for there to be any hope of this helping.

The sign behind Kishida in the photo says it all, the #1 priority to maintain the depreciating yen is inbound tourism. The problem with this is that it doesn't help the ordinary household trying to live off rising inflation and stagnant wages. And these clowns want people to spend more? So the LDP will once again waste money with subsidies as short term popularity boosters so they can perfume the stench coming out of all the rot from the fallout of Abe's death and the Moonies. Meanwhile, across the pond, the Fed will raise interest rates again, so we should see the yen slip even more. It's comical to hear Kishida say he wants to strengthen the econonmy for the future because the only thing the LDP will be leaving is a crippling debt to a dwindling population.

Under the "benefits to the cheaper yen" photo, top line, 0 to 5 cho yen.

How DUMB does he think people are here! It was only zero during the pandemic, but well over what was it 3 cho yen before?

We the average consumer are getting screwed royally by the yen rate, because FOOD costs and necessities, nearly all imported, have risen by over 30% in the past year, so money is getting tighter and tighter!

Some economists are already saying the rate could easily go to 170 to the dollar!

You spend more money to combat inflation? How does that work?

The BOJ’s decision to keep interest rates low is quite sensible. In an economy where supply exceeds demand, raising interest rates is an economic suicide because it would only dampen investment and consumption. On the other hand, when excessive demand pushes prices up, you have to raise interest rates to keep inflation in check and that’s what they are doing in the US.

LDP government's policy always just benefits supporting groups for LDP.

Most of 29 trillion yen will flow to intermediate exploitation, it never helps general citizen. 

PM Kishida emphasizes "innbound", but it involves to sacrifice citizen at Japanese society where Covid19 measures are insufficient and defective as ever.

Part of the tolerance for low yen is the hope that companies will onshore the work they have offshored to China, and also that Japan can up export market share from China. However, the Renminbi is also plunging, so it could be a race to the bottom.

In an economy where supply exceeds demand, raising interest rates is an economic suicide

When supply is high and demand is low prices should go down, not up.

coupons worth 100,000 yen for women who are pregnant or rearing babies.

Japan and its coupons…smh! Printing coupons cost more money and not only the production cost but also the administrative costs! Also in the eyes of the current Government only this category of citizens are affected by inflation so the assistance is for them only. This is pure discrimination against women who can’t have children due to medical conditions or women who are working hard sacrificing their options of having a baby to just make ends meet ( actually these women contribute towards the economy and get nothing in return ). When it comes to stimulus budgets, Japan is the worst in compiling these as the old men on top positions are out of touch with reality and just lack the skills. They’ll never support their hardworking citizens fairly through financial aid.

The LDP still stuck in the 80s/90s after 70+ years in uncontested power. They stoped trying decades ago.

Kishida's first arrow of his plan to increase the welfare of the populace is foreign tourism?

99% of the gains will be seen by the owners and investors of tourist and retail business.

The workers might pick up a few extra shifts? Wages don't appear to be rising despite labor shortages in these sectors.

Maybe the workers dealing with foreign tourists will be forced to take English lessons, and this is Kishida's stimulus for the Eikaiwa industry?

I can’t understand this. The cost of my daily natto changed from ¥79 to ¥110. Does this mean it will go back to ¥79?

"A weaker yen in turn will raise prices in Japan, since it imports much of what it consumes."

So, we'll get a slightly lower energy bill for a month or so, while other costs increase exponentially and wages remain the same. And forget about leaving the country to travel.

Rodney: "I can’t understand this. The cost of my daily natto changed from ¥79 to ¥110. Does this mean it will go back to ¥79?"

Never. Have you ever heard of things going back down in prices despite many times that being promised?

The LDP oyajis are banking on tourist money because of weak yen instead of forcing companies to increase workers wages that constantly receive government subsidies.

Cant wait for this Kuroda guy to leave BOJ. He should have left when Abe resigned along with their 3-arrow abenomics.

Agree with everyone here. My prediction is that the yen will depreciate even more and people will continue to suffer.

and encourage wage hikes,

Not sure why the govt and boj think that will happen. Back when Japan Inc. was raking in the biggest profits in its history, before the pandemic, it came out with all sorts of excuses to continue suppressing workers' wages.

Now, with the drastically worsened global situation, the authorities believe that Japan Inc. will start giving substantive pay raises?

I don't think they're that stupid Jeff. I think they are just paying lip service to the public and that they think the public is stupid enough to fall for this rhetoric. If they were really interested in supporting the people they would OFFICIALLY raise the minimum wage and expand the safety net for the underprivileged. But they don't because they don't care.

If the government can print money any time it wants to then why do we pay so much in taxes? Let us keep our money which will be a 33% increase in income and likely stimulate the economy.

Hyperinflation is imminent once the war in Taiwan happens.

Now we're talking, but ultimately it's not the J-gov which will be running the business, it's...(of course) business.

Shouldn't business be investing in that with "some support" from the J-gov? Why does it sound like the J-gov is financing the whole shebang for somebody else (i.e. business) to rake in the profits? (hint: most likely because that's what it is...) (#nosarcasm)

Unfortunately, Japan's manufacturing power is deteriorating so much now. If the automobile industry is gone due to the global adoption of EVs, Japan doesn't have anything left.

It will be the worse version of the UK without any global financial hub due to Japanese people being resistant to changes and any wealthy foreigners.

The LDP oyajis are banking on tourist money because of weak yen instead of forcing companies to increase workers wages that constantly receive government subsidies.

At the same time, they are trying to offshore their wealth in Southeast Asia through ODA and other Japanese government development schemes that directly fund shadow companies of Japanese political cronies in ASEAN states.

Cant wait for this Kuroda guy to leave BOJ. He should have left when Abe resigned along with their 3-arrow abenomics.

Kuroda or without him, Japan is still screwed either way. The better solution, which Abe planned and is now Kishida carrying out, is to turn Japan into the global financial hub of international settlements like the Bakumatsu era.

Chinese and Vietnamese, the biggest foreign population in Japan will create their foreign settlements in Japan to economically profit among themselves without paying any tax to Japan. Americans, Koreans, Southeast Asians, Russians,... will soon follow. Japan becomes the safe harbor for Asian and international dark finances alike, while Japanese people won't have a voice or profit in this. Real estate prices and prices of everything will go up sky-high due to the rising influx of wealthy foreigners, and Japanese people will be forced to migrate elsewhere.

Imagine future Japan as Djibouti.

99% of the gains will be seen by the owners and investors of tourist and retail business.

Most of the investors and owners in these profitable businesses in Japan are now likely foreigners. The trend of a weak Yen will accelerate to allow a foreign takeover of the Japanese economy.

Chinese people are already big players in Japan.

The LDP still stuck in the 80s/90s after 70+ years in uncontested power. They stoped trying decades ago.

Honestly, the Unification Church and Soka Gakkai rule Japan.

Thanks to Abe's assassination, we now know the truth that Korean fascistic cultists rule Japan (SGI is Korean-lite due to Ikeda having a hidden Korean heritage).

Japan needs to raise minimum wage to 1500 yen per hour to keep the yen strong against the US dollar. Very simple solution.

...coupons worth 100,000 yen for women who are pregnant or rearing babies.

It's a start... Better would be increasing the child care money permanently.

Absolute insanity, the tail wagging the dog... This money printing will only accelerate the '10,000yen coffee' future and fiat will be worth less than confetti, literally. DYOR now rather than later.

market reaction to another flood of stimulus was likely already taken into account earlier in the week as share prices fell Friday in Tokyo

Um… maybe the market reaction to more borrow-print-and-spend from Japan’s big government central planners was to knock down share prices on Friday?

It’s not like this sort of policy is good for the economy. See Kiuchi-san’s wise remarks.

Japan needs to raise minimum wage to 1500 yen per hour to keep the yen strong against the US dollar. Very simple solution.

Let’s go 5,000 yen per hour, no?

Kuroda is a bit crazy, I’m afraid. He can print all the money he wants, but after almost 10 years of merciless money printing, general wages didn’t go up.

The central planners seem clueless about ideas for reforms that could lead to more dynamic wages, as in normal market economies. Japan is doing something wrong and they haven’t put their foot on it. At least we can say now that Kuroda’s dopey idea of financing the government to infinity wasn’t the solution. (That was my verdict from the outset, but alas it takes a different type of genius to be put in a position of power in Japan’s central planning authorities.)

Better would be increasing the child care money permanently.

Based on family income. The wives of millionaires dont need this money.

Both J-Gov and BOJ are one-trick ponies, and their one-tricks are foolishly ineffective. So, here they are going the way of Zimbabwe.

As the Gumpism goes: stu is as stu does.

So many posters here are truly insightful (no sarcasm) and many view the country with long years of experience and/or with obvious learning and considered opinion.

I myself wonder how Japan has gone to being a fabled exceptional country to this pitiful decline that just gets worse?

Are these people stupid? Printing more money to combat inflation is akin to put off a fire with petrol. Do not keep your money in yen, people!

Japan will become socialist one day. This is unavoidable. Buddhism came to Japan from Korea in the 6th century. Socialism will come to Japan from Korea already in the 21st century.

Japan needs to raise minimum wage to 1500 yen per hour to keep the yen strong against the US dollar. Very simple solution.

Please do some research before making comments like this. You are in effect going to cause a further spike in inflation in many prefectures, as the average minimum wage in Japan 872 yen, BUT that average is actually skewed by Tokyo and Kanagawa and there are actually close to 30 prefectures that are currently UNDER the average too!

Businesses would shut down, others would jack prices and what good would your idea be then?

Real easy to just say "raise the minimum wage", but one has to think about the circumstances first!

Japan will become socialist one day

Japan is very socialist in many respects. There are glimpses of capitalism at different times and places, but all the recent decades of big government print-and-spend looks more like socialism.

Capitalism is more about decentralized actors seeking to better their own fortunes by serving their fellows well, than it is about Tokyo bingeing money and racking up debts to be repaid by the kids.

Real easy to just say "raise the minimum wage", but one has to think about the circumstances first!

I am opposed to all price controls, including minimum wages, but I don’t think minimum wage hikes are a big contributor to inflation. Too much money is the main problem. People earning the minimum wage aren’t producing that much stuff nor consuming that much stuff, so it’s an irrelevance for me in the bigger scheme of things. The whole notion of some people knowing what price another person may legally work for is just ridiculous. Let people make their own decisions.

 seeking to better their own fortunes by serving their fellows well

LOL

Spending like this absolutely means our taxes will be raised in the near future. Sigh.