No further stimulus under consideration now: Aso

May 14, 2019

Tokyo--Despite signs of a faltering economy in Japan ahead of a consumption tax hike in October, the government is not considering any further stimulus measures at the moment, Finance Minister Taro Aso said Tuesday.

Referring to negative economic implications from escalating U.S.-China trade friction, Aso told a news conference that the government does not believe the situation will develop into a crisis as severe as the 2008 financial meltdown.

On Monday, the Cabinet Office said the country's composite index of coincident economic indicators fell from the previous month in March. Based on the result, the government agency downgraded its view of the index, saying that it is "worsening," the first such assessment in over six years.

At a press conference on the same day, Chief Cabinet Secretary Yoshihide Suga suggested that the government could take additional stimulus measures.

But on Tuesday, Aso said that Suga just mentioned the need to create an environment that warrants the 2-percentage-point tax rate hike to 10 pct.

Meanwhile, Minister of Economy, Trade and Industry Hiroshige Seko said at a separate press conference on Tuesday that the government is paying close attention to impacts of the U.S.-China row on businesses and other economic activities in Japan, as well as to talks between Washington and Beijing.

Seko said it is "difficult" to assess the trade war's impact on the intricate supply chains built by Japanese manufacturers around the world.

"We expect the United States and China to find a constructive solution to the trade friction through dialogue," Chief Cabinet Secretary Yoshihide Suga told a news conference on Tuesday.

"We need to be prepared for the trade friction to be prolonged," Kengo Sakurada, chairman of the Japan Association of Corporate Executives, or Keizai Doyukai, said at a regular news conference on the day.

"At this moment, we don't see a deterioration (of the domestic economy)," he said.

The business leader urged the government to carry out the consumption tax hike as planned, while claiming that additional stimulus is not necessary. Jiji Press