The Abe administration will soon compile an around ¥12 trillion supplementary budget for fiscal 2012 and the fiscal 2013 initial budget. Prime Minister Shinzo Abe is pushing for a bold economic policy to pull the Japanese economy out of a long period of deflation, including unlimited monetary easing by the Bank of Japan and massive investment in public works projects. In an attempt to win in the Upper House election to be held in the coming summer, the Abe administration is likely to try every available means to stimulate the economy. But its economic policy must be closely watched because it may produce undesirable side-effects.

Mr. Abe hopes that the prime minister's headquarters will take an initiative in carrying out the government's economic policy. Trade and Industry Minister Toshimitsu Motegi, Finance Minister Taro Aso and Economic Revitalization Minister Akira Amari will play leading roles in the newly created Japanese economy revitalization headquarters.

Mr. Abe will also revive the Council on Economic and Fiscal Policy. He should be careful to prevent the council from lopsidedly accepting opinions from business leaders to the exclusion of opinions of labor union leaders and consumers.