Japan Eyes More Local Grants to Tackle Inflation

Tokyo, Nov. 11 (Jiji Press)–The Japanese government is considering expanding an intensive grant program that allows local governments to flexibly decide how to use the subsidies as part of efforts to address rising prices under an upcoming economic package, informed sources said Tuesday. According to a draft of the economic package, the government said it would implement detailed measures to mitigate the impact of soaring prices, tailored to local conditions. In the package to be adopted shortly, the government aims to issue premium gift certificates and distribute rice and grocery coupons. Also expanding the intensive grant program, the central government aims to create an environment that encourages small and midsize companies to raise wages and make capital investments. The government will also support loss-making businesses that cannot use the tax incentives to promote wage increases, the sources said. The government plans to implement a measure to help reduce the energy cost burden on households by providing subsidies for electricity and gas fees during the severe winter season. To realize a strong economy through crisis management and growth investments, the government is expected to focus on five areas– strengthening economic security, establishing food security, strengthening energy and resource security, expanding investment in disaster prevention and expanding investment to open up the future. In response to U.S. tariff measures, Japan will ease eligibility requirements for state-backed Japan Finance Corp.’s safety-net loans to support cash flow for affected small and midsize companies. Interest rates will be lowered for businesses experiencing a 5 pct or greater decline in sales or profit margins. To steadily implement its pledge to invest 550 billion dollars in the United States based on the Japan-U.S. tariff agreement, the Japanese government will strengthen the financial foundations of the Japan Bank for International Cooperation and the Nippon Export and Investment Insurance. Regarding fiscal management, the government said it would not hesitate to spend the expenditures necessary to carry out policies required now, according to the draft. As for the Bank of Japan, the draft said, “It is extremely important that appropriate monetary policy operations are conducted to achieve both strong economic growth and price stability going forward.” END [Copyright The Jiji Press, Ltd.]