Japan to curb electricity costs amid weak yen, recession risks, PM says

TOKYO  – Japan will take “unprecedented” measures to curb rising electricity bills for households and businesses as a weak yen fans inflation and global recession fears pose big risks to the economy, Prime Minister Fumio Kishida told parliament on Wednesday.

“Rising energy and food prices due to Russia’s invasion of Ukraine, coupled with a weak yen, and the fears of global economic slowdown are big risk factors to Japan’s economy,” Kishida said.

Consumer prices in Japan’s capital Tokyo rose in September at the fastest pace since 2014, government data showed on Monday, highlighting the increasing burden for households from the yen’s plunge to 24-year-lows.

The government will compile another economic stimulus plan by the end of October, including a rare measure to directly ease the rise of electricity prices that are subject to abrupt price flare-ups, Kishida said.

Faced with falling public approval rates, Kishida’s ruling party is considering a fresh spending package worth at least $100 billion to address inflation.

On the weak yen, it is important for Japan to link it to economic revitalisation through a recovery of inbound tourism, bringing companies back to the country and expanding agricultural exports, Kishida said.

When an opposition lawmaker asked about the Bank of Japan’s (BOJ) ultra-easy policy that has fuelled the yen’s decline amid global central banks’ tightening, Kishida said specific monetary policy moves, such as an exit from easing, were up to the BOJ to decide.