TOKYO (Reuters) – Japanese ruling party secretary general Toshimitsu Motegi indicated on Monday that a planned economic spending package aimed at cushioning the blow from rising living costs will total around 26 trillion yen ($174 billion), Kyodo news agency reported.
Prime Minister Fumio Kishida’s administration is expected to approve the package at a cabinet meeting on Oct. 28, the same day the Bank of Japan (BOJ) completes a two-day policy review.
In contrast to many other central banks, the BOJ has stuck to its ultra-easy monetary policy citing Japan’s slow economic recovery from the pandemic and the central bank’s view that inflation would fall short of its 2% target sometime in 2023.
The growing interest-rate differentials between Japan and other countries have been blamed for the yen’s sharp weakening this year to levels that authorities fear are harming the economy.
In a speech at Kyodo news, Motegi said an early rate hike would do more harm than good for the economy.
“It should be a process over about one year, and it would be difficult to suddenly raise interest rates,” he said at the event, according to Kyodo.
He added, however, that “that was not the same thing as not reviewing the current bold monetary easing policy at all,” Kyodo said.