Economic Planning Agency chief Taichi Sakaiya asked other Cabinet members Tuesday to study measures to bring about Prime Minister Yoshiro Mori’s “Japan rebirth plan.”
Mori has instructed Sakaiya to take the initiative in compiling concrete policies for the plan.
Sakaiya urged his fellow ministers during an informal Cabinet meeting to come up with legislative and deregulatory measures in four strategic fields by the end of this month.
With an eye to the formulation this fall of a supplementary budget for the current fiscal year, Sakaiya said he has asked for measures that need to be “intensively” carried out before fiscal 2001.
Mori has called for measures in four strategic fields: information technology, the environment, the aging population and urban infrastructure.
Interest hike opposed
Economic Planning Agency chief Taichi Sakaiya on Tuesday reiterated his opposition to an immediate abolition of the Bank of Japan’s “zero-interest-rate” policy.
“It is necessary to cautiously judge whether the policy should be scrapped or not, and the time is not ripe for it to be abolished,” the EPA director general said at a news conference.
The BOJ Policy Board is set to discuss a proposal Monday to scrap its ultraeasy monetary policy, in place since February 1999.
Under the policy, the central bank has been guiding the interbank call money rate to essentially zero in a bid to revive the health of the banking system based on wider lending margins and to lower borrowing costs for both banks and nonfinancial businesses.
Sakaiya said, however, that Japan is at present in a situation where “even if the zero-rate policy is scrapped, it would not deal a serious blow to the macroeconomic situation.”
But he cautioned: “We sense the danger that an alteration of the policy could be subjected to excessive interpretations.
“It is necessary to give a notification period” to prevent the market from responding to a possible abolition in an exaggerated manner, he said.
He denied suggestions that financial markets have already factored in the possible axing of the policy.