Press Conference by Minister Saito (Excerpt)

*Note: This is a provisional translation for reference purposes only.

9:40 to 9:49 a.m.
Friday, February 16, 2024
Press Conference Room, METI Main Building

 

Opening Remarks

Cabinet decision on the bill to partially amend the Act on Strengthening Industrial Competitiveness and other acts

At the beginning, I would like to mention one point.
Today, a cabinet decision was made on the bill to partially amend the Act on Strengthening Industrial Competitiveness and other acts. The Japanese economy faces a turning point, where the highest levels of wage increase and domestic investments in 30 years are being anticipated. To maintain this momentum and completely overcome the deflationary structure that has continued for many years, private companies are required to lead investment and innovation and facilitate a transition to a growth-oriented economy in which a high-level wage increases continue.
To this end, it is necessary to strategically expand domestic investment and promote innovation and rejuvenation. Based on that idea, this bill provides for large-scale, long-term tax measures regarding investment and production in strategic fields, tax measures to strengthen Japan’s competitiveness in locations used as research and development bases, and support targeted for medium-ranking firms and startups.
Regarding detailed information, the administrative staff will provide a briefing later.

Question-and-Answer Session

Stock prices

Q: I would like to ask you about stock prices. Stock prices are approaching the record high level that was reached during the bubble economy era. While stock prices were rising globally, it took 34 years for Japan’s stock prices to start rising. Regarding what is causing that, please share your reflections on Japan’s economic policy.
Also, do you think that Japanese companies have been bold enough in making capital investments and embarking on new projects?

A: Those are very important questions.
Yesterday, the stock price index closed at 38,157 yen, which is the highest level in 34 years. Day-to-day movements of stock prices are determined in the market by various factors, such as economic conditions and corporate activities, so I, as the Minister of Economy, Trade and Industry, would like to refrain from commenting on the stock price level itself. That said, looking back at the course that the Japanese economy has been following, our understanding is that amid the so-called balance sheet recession and the prolonged deflation after the collapse of economic bubbles, companies devoted themselves to expanding profits through cost reduction, leading to a cost-cutting economy.
We also understand that under the idea that the private sector is responsible for taking the initiative in the economy, the government regarded the development of a market environment that removes constraints on the private sector’s activities as the centerpiece of its policy. As a result, we view the efforts to create new value and demand as insufficient.
On the other hand, the current Japanese economy has reached a turning point because of changes in macroeconomic environments at home and abroad and the industrial policy that takes advantage of solving social challenges as a growth engine. The level of domestic investments is the highest in around 30 years, while the amount of funds raised by startups has been on a steady uptrend, increasing ten-fold over the past 10 years.
We would like to seize this opportunity and make active efforts to shift from the cost-cutting economy to a growth-oriented economy, in which investments, wages, and commodity prices all increase.