TOKYO (Reuters) – Japanese ruling party secretary general Toshimitsu Motegi indicated on Monday that a planned economic spending package aimed at cushioning the blow from rising living costs will total around 26 trillion yen ($174 billion), Kyodo news agency reported.
Prime Minister Fumio Kishida’s administration is expected to approve the package at a cabinet meeting on Oct. 28, the same day the Bank of Japan (BOJ) completes a two-day policy review.
In contrast to many other central banks, the BOJ has stuck to its ultra-easy monetary policy citing Japan’s slow economic recovery from the pandemic and the central bank’s view that inflation would fall short of its 2% target sometime in 2023.
The growing interest-rate differentials between Japan and other countries have been blamed for the yen’s sharp weakening this year to levels that authorities fear are harming the economy.
In a speech at Kyodo news, Motegi said an early rate hike would do more harm than good for the economy.
“It should be a process over about one year, and it would be difficult to suddenly raise interest rates,” he said at the event, according to Kyodo.
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He added, however, that “that was not the same thing as not reviewing the current bold monetary easing policy at all,” Kyodo said.
($1 = 149.2800 yen)
(Reporting by Elaine Lies and Chang-Ran Kim; Editing by Andrew Cawthorne and Jacqueline Wong)