While Prime Minister Naoto Kan's Cabinet reshuffle was not radical, it sent out clear messages on some of the major economic and fiscal issues the new administration faces, including the promotion of a trans-Pacific free-trade pact and a hike in the consumption tax, economists said Friday.
"In terms of fiscal reconstruction, the appointments show the new Cabinet is more focused on the issue," said Hideki Matsumura, senior economist at The Japan Research Institute. More specifically, the new Cabinet will seek to push for a hike in the sales tax, Matsumura said.
Such a view is backed up by Kan's selection of two former finance ministers known as advocates of fiscal reconstruction — Kaoru Yosano, who has been appointed economic and fiscal policy minister, and Hirohisa Fujii, who was tapped for deputy chief Cabinet secretary.