Regarding the Takaichi administration’s economic policy, former Bank of Japan official Watanabe Tsutomu (渡辺 努) and highly skilled fund manager Tsukaguchi Naofumi (塚口 直史) sound the alarm over the outlook and the need for a Plan B. The issues include the risks if the growth strategy centered on AI and semiconductor investment fails to materialize, and how to capitalize on the current opportunity.
As one year has passed since the administration was formed, Watanabe Tsutomu (渡辺 努) and Tsukaguchi Naofumi (塚口 直史) indicated that the Takaichi administration’s economic policy lacks a logical growth strategy and pointed to problems with fiscal management based on the assumption of growth.
The two highlighted the absence of a Plan B and discussed the balance between fiscal austerity and government spending. They also referred to the role of financial measures, including requests for the Governor of the Bank of Japan to purchase Japanese government bonds and the use of GPIF.
Citing simulations from the start of the war between Japan and the United States, Tsukaguchi Naofumi (塚口 直史) argued that the assumptions underlying monetary and fiscal policy need to be revisited, and stressed the need for caution in light of the historical background in which deposit levels determined interest rates.
Japan is now at a turning point following its exit from deflation. While it has been noted that companies are beginning to raise prices and wages are beginning to rise, the view was expressed that it is important to develop a Plan B for the growth strategy.
The full article appears in Bungeishunju PLUS and the November issue of Bungeishunju, and this article is presented as a summary.