FX.co ★ Japan to Set Economic Stimulus Plan Amid BoJ Coordination

The Japanese government is anticipated to finalize an economic stimulus package on November 21, signifying Prime Minister Sanae Takaichi's inaugural major policy move since assuming office last month. As per a draft outline obtained by Reuters, this package will encourage the Bank of Japan to prioritize robust economic growth with stable prices, reflecting Takaichi’s inclination to maintain low interest rates to bolster a fragile recovery. "It's crucial for monetary policy to be directed in a way that achieves strong economic growth and price stability," the draft indicated. The plan will incorporate measures to mitigate the impact of rising living expenses, enhance crisis management and growth investments, and bolster Japan’s defense capabilities. Furthermore, the government has committed to close coordination with the BoJ to avert a return to deflation and sustain growth. According to the Nikkei, the package will include tax reductions aimed at stimulating investment in 17 key sectors.