The leader of Japan's biggest opposition party challenged the government to better protect the elderly and small companies, charging Prime Minister Shinzo Abe's policies with ignoring the risks of monetary easing and a weakened currency.
"It's a fact that monetary easing and a weaker yen improved the mood, but there are also side effects and risks," Goshi Hosono, secretary general of the Democratic Party of Japan, said yesterday on public broadcaster NHK's Sunday Debate. "The government hasn't taken sufficient care regarding the increased burden on pensioners and small business from rising import prices."
Polls show voter support for policies that have helped drive benchmark stocks to five-year highs this year. The Topix Index closed last week 54 per cent above the level of mid-November, when Abe pledged to revive growth by targeting 2 per cent inflation. Japan's economy expanded the most in a year in the first quarter as pledges for monetary easing weakened the yen and boosted shares, supporting exports and consumer spending.
Some 35 per cent of respondents in an April 23 Mainichi newspaper poll cited the economy as the most important issue in parliamentary polls scheduled next month. Abe, whose first, 12-month stint as premier ended in 2007 due to ill health, is supported by 74 per cent of the electorate, according to a Yomiuri newspaper poll published on April 16.
Along with monetary and fiscal stimulus, Abe plans a structural reform package to be unveiled this month.
The International Monetary Fund last week endorsed Abe's policies and the Bank of Japan's monetary easing, saying that a slide in the yen was "not problematic" provided the government rolled out a "complete package" of fiscal and structural reforms. Abe and Bank of Japan Governor Haruhiko Kuroda can achieve 2 per cent inflation in the near to medium term so long as additional measures complement the bank's easing, according to the IMF.