Japan’s top economic policy panel has held its first set of talks over the medium- to long-term direction of fiscal and monetary policies, as well as the merits and downsides of “Abenomics”
Under former prime minister Shinzo Abe, Japan implemented a reflationary policy led by monetary stimulus, which helped bring the world’s third largest economy out of 15 years of deflation.
In light of strong increases in inflation, the attention of the financial markets has shifted to whether or not the central bank will reduce monetary support.
Economy Minister Shigeyuki Goto told reporters, “There’s a global economic trend of shifting towards new policy as seen in (U.S. Treasury Secretary Janet) Yellen’s calls for modern economic policy, which would mark a shift away from conventional supply-side economics.”
Multiple more sessions will be organized to reflect the debates on the government’s June release of its annual economic strategy framework.
Goto stated he will attend this week’s Davos meeting to underline Japan’s stance of prioritizing short-term economic recovery above medium- to long-term budget reform.
The event was attended by eight economists, including an expert on the country’s inflation tendencies.