Hiroshi Okuda, chairman of the Japan Federation of Employers’ Associations (Nikkeiren), said Wednesday that he hopes Prime Minister Yoshiro Mori’s new Cabinet will work toward the full recovery of Japan’s economy.
“We welcome the new Cabinet, which is comprised of experienced politicians, when the nation faces various domestic and international problems,” Okuda said.
Okuda said he hopes the Cabinet will successfully host the July 21-23 Group of Eight summit in Okinawa.
In the long term, the new Cabinet should draw up a comprehensive plan for the nation’s welfare system, including pension schemes and medical care, and follow through on it, he said.
Business leaders in general welcomed the reappointment of certain ministers to key Cabinet posts after the formal announcement Tuesday night.
The reappointment of Kiichi Miyazawa as finance minister, Taichi Sakaiya as director general of the Economic Planning Agency, and Yohei Kono as foreign minister means a “continuity of policy,” said Takashi Imai, chairman of the Japan Federation of Economic Organizations (Keidanren).
Kosaku Inaba, chairman of the Japan Chamber of Commerce and Industry, said the reappointments are “natural” given the Okinawa summit.
The new lineup was greeted calmly by financial markets and business focus has now moved to other pressing economic matters, such as the timing for a supplementary budget and a possible monetary tightening by the Bank of Japan.
Asked about speculation that the central bank may end its “zero-interest-rate” policy later this month, Okuda said the central bank should wait for April and June business results.
Okuda pointed to the yen’s strength against the euro, dismal stock prices and a high unemployment rate as factors that may have a negative influence on businesses.
With the BOJ’s “tankan” business sentiment survey for June reflecting corporations’ improved confidence over the past three months, some experts predict the BOJ may abandon the ultraeasy monetary policy as early as its next Policy Board meeting July 17.
The BOJ started guiding the interbank overnight call monetary rate to essentially zero in February 1999 to ensure economic recovery.