By TraderVox.com
Tradervox.com (Dublin) – Seiji Maehara, the Japanese Economy Minister, have indicated that the country needs additional stimulus and policy efforts to boost growth prior to the nations election where the opposition has gained greater public support. In an interview at Fuji Television, Maehara indicated that the government intends to inject 200billion yen in the economy. He also pointed out that the fiscal spending for the year includes 910 billion yen stimulus programs which require parliament approval, indicating that 400bilion is for the earthquake recovery. Maehara further noted that there are fiscal-easing moves around the world and Japan has fallen short on the monetary basis.
The Japanese government lowered its economic forecast for the third month straight on October 12, making this the longest stretch of declines since 2009. The Prime Minister Yoshihiko Noda ordered the cabinet to draw up a strategy on introducing stimulus by next month as the government pushes the Bank of Japan to intervene. According to Masamichi Adachi, a senior Economist in Tokyo at JPMorgan Securities, the push by the Prime Minister to instigate stimulus plan has increased speculation that the Bank of Japan will add stimulus in the coming meeting on October 31.
Adachi also noted that there is added pressure on the Bank of Japan to add stimulus. In a report to investors, Adachi indicated that the central bank will probably add 10 trillion yen. The Japanese Prime Minister met with the Liberal Democratic Party leader and the New Komeito leader as they agreed on legislation to double the 5 percent sales tax and an early election. Maehara however noted that the elections will not necessary come next year. He added that the election might be announced this year as Noda always keeps his promises. Noda seeks to add sales tax in order to reverse a decade of deflation which is projected to dampen consumption.
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