ISE, MIE PREF. – Prime Minister Shinzo Abe has renewed his pressure on the Bank of Japan to play a more assertive role in the economy’s recovery, raising the adoption of his proposed 2 percent inflation target by the central bank yet again.
“As the BOJ’s monetary policy is vitally important to an economic rebound, I hope it will implement a 2 percent inflation goal in a responsible manner,” Abe said Friday in the city of Ise, Mie Prefecture, where he held his first news conference of the year.
BOJ Gov. Masaaki Shirakawa has not ruled out the possibility of introducing a 2 percent inflation target at its next Policy Board meeting from Jan. 21-22, following repeated calls by Abe for more aggressive monetary easing.
After visiting Ise Jingu Shrine in Mie, Abe also said his new Liberal Democratic Party administration is determined to “rocket-start” the flagging economy by crafting a large supplementary budget for the current fiscal year and by revising the annual budget for fiscal 2013, which starts April 1.
Abe said his government will conduct a complete review of the fiscal 2013 budget drafted by the ousted Democratic Party of Japan administration, and aims to produce a fully revised version by the end of the month.
The LDP, which Abe heads, swept to victory in the Dec. 16 House of Representatives election, returning to power after three years in the opposition.
Touching on the March 2011 earthquake and tsunami, Abe pledged to speed up work to reconstruct disaster-hit areas but remained cagey about resuming construction of new atomic power plants following the three core meltdowns at the Fukushima No. 1 plant that month.
“I will take a certain period of time to consider” whether to approve a restart of work on new nuclear power stations, as it is “not an issue that can be decided immediately,” Abe said.
On the diplomatic front, Abe, who is slated to visit Washington this month in his first overseas trip since forming his Cabinet Dec. 26, said the Japan-U.S. alliance “should be given top priority.”
He also voiced hopes that his planned face-to-face meeting with U.S. President Barack Obama will prove to the rest of the world that the bilateral relationship, which Abe claims was weakened during the DPJ’s three-year rule, has been “revived” and put back on a solid footing.
Abe has frequently expressed his desire to strengthen Tokyo’s ties with Washington, especially in the area of security, in the wake of the DPJ’s three years in office.
Yukio Hatoyama, the first prime minister of the DPJ administration, in 2009 sought to renege on a long-standing bilateral deal and relocate U.S. Marine Corps Air Station Futenma outside of Okinawa Prefecture, although he later abandoned the plan in a complete policy U-turn.
New DPJ President Banri Kaieda, who also visited Ise Jingu on Friday, meanwhile stated his commitment to rebuild the party in time for this summer’s House of Councilors election, after the electorate booted it from power in last month’s Lower House poll. The DPJ-led coalition still retains a majority in the upper chamber of the Diet.
Calling 2013 “the year to bounce back” from its shattering election defeat, Kaieda said the DPJ aims to strike back in the Upper House poll by cooperating with other opposition parties to snatch seats from the LDP and New Komeito.
No limit on bonds: Aso
Finance Minister Taro Aso has said the government will not limit the amount of government bonds that can be issued when crafting an extra budget for fiscal 2012, hinting it will not stick to the annual ¥44 trillion debt cap set under the Democratic Party of Japan government.
“I do not have any intention to cap the amount” of new bond issuance, Aso told reporters Friday during his visit to Myanmar.
As for the size of the supplementary budget to be drafted by the new Liberal Democratic Party-led administration, Aso said it will “definitely be on the large side.”
He also did not rule out the possibility of appointing a former Finance Ministry official as the next governor of the Bank of Japan. The term of current BOJ Gov. Masaaki Shirakawa expires in April.