[Provisional Translation]

CABINET PUBLIC AFFAIRS SECRETARY: We will now begin the press conference by Prime Minister Shinzo Abe.
We will begin with a statement from the Prime Minister.  Mr. Prime Minister, your opening statement, please.

(Opening statement by Prime Minister Shinzo Abe)

PRIME MINISTER ABE: After 150 days in session, the ordinary session of the Diet came to a close the day before yesterday.

The Diet successfully enacted first of all the supplementary budget in January, as well as the budget for fiscal 2014 and almost all the bills submitted by the government.  In particular, a number of important bills, including a new law that dramatically strengthens our measures to fight against intractable illnesses and a fundamental law to promote micro enterprises, were enacted unanimously, receiving support from opposition parties as well.

I would like to take this opportunity to express my heartfelt appreciation to of course those in the ruling parties as well as those in the opposition parties who cooperated with us and, most of all, the Japanese public who kindly gave us their understanding and support.

This Diet was truly "the Diet to bring about an economic virtuous cycle." 

This spring, a large number of companies raised wages.  A survey by RENGO, the Japanese Trade Union Confederation, indicates an average wage increase of more than 2 per cent, resulting in the steepest increases in a decade.  Among small- and medium-sized enterprises as well, some surveys indicate that some 60 per cent of them have implemented wage increases.  In addition, a survey conducted by Keidanren (the Japan Business Federation) indicates that this year’s summer bonus is expected to rise at the strongest rate seen at any time in the last 30 years.  The ratio of job offers to job seekers has risen for 17 consecutive months, reaching the highest level in seven years and nine months.

And, amidst improvement in the employment situation, there have emerged companies that are making their non-regular workers into permanent employees.  Corporate earnings lead to expanding employment and rising income.  Truly, we are seeing an economic virtuous cycle beginning to emerge.  The Japanese economy is again trying to restore the confidence in the idea that if you work hard, you will be rewarded.

However, the actual situation in the local regions is still quite difficult because of the sudden rise in the cost of fuel and other such factors.

We increased the consumption tax rate from April.  In order to reduce that burden, we will provide a benefit of 10,000 yen to households with children that receive the child allowance and to low-income individuals.  Moreover, we will include an additional 5,000 yen for pensioners, for a total benefit of 15,000 yen.  We have begun accepting applications in order from this month.  By all means, please ask the municipality where you live about these benefits.

At any rate, we cannot yet say that the winds of economic recovery have reached every corner of Japan.  That is precisely why we cannot allow the economic virtuous cycle that came into being this year to end as only a temporary phenomenon.  Following this, small- and medium-sized enterprises (SMEs) and micro enterprises all over the country will become reinvigorated through our dynamic turning of this virtuous cycle.  Moreover, we will enable people all throughout the nation to feel this turnaround in the economy tangibly and without fail.  I consider that to be the quintessential mission of Abenomics.  Everything depends on the execution of the Growth Strategy.

Today, we boldly equipped that Growth Strategy with even greater “punch” than before.  When all is said and done, the most important pillar of the Growth Strategy is revitalizing local regions.  It is the regional areas that will play the leading role in growth.

I have been visiting the disaster area in Tohoku virtually every month.  Although reconstruction is still only half done, we have been staying faithful to the feelings of the disaster victims as we press forward forcefully to restore the livelihoods that are deeply rooted in those communities.

This month, I visited Shimane and Tottori Prefectures. The local areas boast a sizable array of specialty products of which they can be proud, including locally grown beef, delicious rice, very sweet watermelons, and locally brewed beer.  We will recover our vibrant local regions through making the best use of the special characteristics of our local communities.  We will institute a Headquarters for building up local regions and I will stand at the helm, doing my very utmost to revitalize our local areas.  I am determined to do this.

Last year’s Growth Strategy has already brought forth sizable results over the course of the year.

The export of agricultural, forestry and marine products surpassed 550 billion yen last year, the highest level ever.  We have also at long last reached our target of 10 million non-Japanese tourists, which had long been out of reach.  The travel balance recorded a surplus for the first time in no less than 44 years, since the time of the Osaka World Expo.  In Southeast Asia, the Middle East, and Africa, I myself have been proactively and directly engaged in our efforts at the highest levels to expand our markets.  We succeeded in receiving orders for more than 9 trillion yen in infrastructure during past year, a figure that triples orders received during 2012.

As we work to eliminate childcare waiting lists, some 530 thousand women have newly started working.

The Growth Strategy of the Abe Cabinet is pushing ahead tirelessly and vigorously even now.

This Diet session saw the passage of as many as 30 bills related to the Growth Strategy.  We will liberalize the electricity market, where monopolies have been in place for 60 years.  We also decided to do away with the policy of reducing rice acreage that has been in force for more than 40 years.  The Abe Cabinet’s Growth Strategy has neither taboos nor sanctuaries.  What it has is one thing only:  the strong will to unrelentingly see the Strategy through to the end.

Within the new Growth Strategy as well, we dauntlessly strove to take on the rigid regulations and systems that are like bedrock.  We will embark on labor system reforms that will diversify how we work and we will begin to utilize capable non-Japanese human resources.  We will also carry out fundamental reforms to agricultural cooperatives for the first time in 60 years.  In the field of medical care, we will introduce new patient-oriented systems.  We will also increase still further the menu of offerings for regulatory reform within National Strategic Special Zones and move them swiftly into implementation.

We will take major strides forward towards free major economic zones.  We will further accelerate negotiations on the Trans-Pacific Partnership (TPP) Agreement as well as negotiations on an Economic Partnership Agreement (EPA) with the EU.  As we are in an era of international mega-competition, the corporate tax must also be reformed to become oriented towards growth.  We aim to reduce the percentage level of the corporate tax rate down to the twenties over several years, beginning in fiscal 2015.

We will create a society in which women shine.  We will realize the elimination of waiting lists in after-school care as well, thereby breaking through the "first grade wall,” whereby mothers often quit their jobs when their children enter elementary school, which has hindered the active engagement of women for many years.

We will bring into full bloom every sort of potential that the Japanese economy holds.  Towards this end, the Abe Cabinet will break through any and all walls.

Today, President Aquino and I held a summit meeting, at my invitation.  The Philippines is an important neighbor for Japan and a friend with which we share values.  President Aquino expressed his strong support for Japan playing a proactive role in the field of security going forward.  We cannot under any circumstances accept changes to the status quo with force in the background.  My statements appealing for the importance of the rule of law have now received strong support from the member economies of APEC, the member nations of ASEAN, and the countries of the G7.

North Korea’s development of nuclear weapons is becoming increasingly serious.  Most of Japan falls within the range of these missiles.  The threats of terrorism and cyber attacks cross borders instantaneously.  We cannot turn our eyes from such a reality.  Whatever the situation, I will fully safeguard the lives of the people as well as their peaceful daily existence.  That is the great responsibility that I have as the Prime Minister.

Consultations among the ruling parties on security legislation will continue to move forward in a thoroughgoing and intensive way.  When we take a decision on this, we will do so on that basis in a well-considered manner, in order to safeguard the lives and livelihoods of the people, acting as responsible ruling parties.

Last month, North Korea promised to conduct a comprehensive and full-scale investigation into all Japanese abductees.  I feel we have succeeded in finally opening the door to negotiations that had for a long time been firmly shut.  My mission will not be complete until the day comes that the families of all the abductees are able to embrace their loved ones in their own arms.  Grounded in that determination, I will work with all my might to have this investigation lead to the concrete result of all abductees returning to Japan.  We must not resign ourselves to this being impossible.  Unless we take on this high wall directly confronting us with faith in the possibility of a good outcome, no matter how slight, the path forward will not open up to us.

The world is changing dramatically.  In such an era, nowhere do we find any guarantee that the common sense in effect until yesterday will be applicable tomorrow.  We cannot avert our eyes from reality.  Whether it be the economy or diplomacy and security, there is no other way than for us to break through walls through our own power and advance forward.

Our efforts to tackle various difficult issues thus far are now without a doubt about to bring forth positive results.  I firmly believe that there is no other way forward.  Tomorrow is certain to be better than today.  In order to restore a Japan brimming with such expectations, and a Japan that properly safeguards our lives as well as our peaceful existence, I am determined to continue to follow this path together with the Japanese people.  I ask for your further understanding and support.

I will end my opening statement here.

(Q&As)
CABINET PUBLIC AFFAIRS SECRETARY: We will now open the floor to questions from the press.  Please raise your hand if you would like to ask a question.  When you are called on, please first state your name and affiliation before asking your question.  Please make your questions concise, as we would like to take questions from as many people as possible.   I will begin with a representative of a company coordinating the press club.

REPORTER (JOJIMA, TOKYO SHIMBUN): I am Jojima with the Tokyo Shimbun.
Mr. Prime Minister, you mentioned consultations between the ruling parties on security legislation.  Some say that if the interpretation of the Constitution is changed to allow Japan to exercise the right to collective self-defense, it will be possible to participate in the wars of other countries.  The UK and other countries that participated in the wars of the United States by exercising their right to collective self-defense brought about a large number of victims.  You have been emphasizing safeguarding the security of the people and regional stability based on a Proactive Contribution to Peace, but will Japanese victims not also accompany this?  I would like you to explain this to the public.

PRIME MINISTER ABE: My awareness of the issue of the right to collective self-defense is that it is a matter of how we should safeguard the lives of the people as well as their peaceful existence, and what we should do towards that end.  As the Prime Minister, who bears this responsibility, I am determined that we must take on this issue.

For example, as in the example I gave at the last press conference, should conflict break out in neighboring countries, if U.S. vessels transporting Japanese nationals trying to escape from those countries came under attack, would it really make sense that there is nothing we can do to defend those Japanese nationals, and that we cannot defend them even if the Self-Defense Forces had the capability?  We have a responsibility to provide a solution to this issue.

As the Prime Minister, I bear responsibility for safeguarding the lives of the people as well as their peaceful daily existence.  We must set in place a domestic legal structure for defending the Japanese people that is seamless at all times.  It is from that perspective that we are undertaking the current examination of the issue.  By properly taking such countermeasures, deterrence will increase and the likelihood of us becoming involved in a war will decrease.  The same sort of controversy was expressed extensively in the past during the discussions on the 1960 United States-Japan Security Treaty—“If the security treaty is amended Japan will be drawn into wars.”  But how did this turn out in fact?  I believe that it is necessary for us to rethink this in a level-headed manner and now, in good faith, work through those issues facing us for which we must put forth a solution.

At present, the ruling parties are advancing their discussions grounded in such a consciousness regarding this issue.  This will not change the basic stance Japan has had until now that exercise of the right of self-defense permitted under the current Constitution will remain within the bounds of the minimum necessary.  On no account will we participate in the future in conflicts like the Iraq War or the Gulf War, which had the exercise of force as their objective.  We will continue to fully uphold the pacifism advanced in the Constitution.  Since the end of World War II, Japan has consistently followed the path of a peace-loving nation.  There will be no change in this path in the future.

CABINET PUBLIC AFFAIRS SECRETARY: I would like to take the next question, this time from the other company coordinating the press club.

REPORTER (UTSUMI, KYODO NEWS): I am Utsumi, with Kyodo News.
There are criticisms that the norms of the Constitution will be undermined if exercise of the right of collective self-defense is allowed through a change to the interpretation of the Constitution, as you are aiming for.  If there are changes in the security environment, do you intend to respond to that with changes in the interpretation of the Constitution in the future as well, or do you consider it necessary to undertake amending Article 9 of the Constitution?  What are your thoughts on the timing of changes to the domestic legal structure and a reshuffling of the Cabinet, accompanying changes to the interpretation of the Constitution?

PRIME MINISTER ABE: First of all, as for the pros and cons of amending the Constitution, I believe that a decision should be made within the context of deepening national discussions on this issue.  I have high hopes that national discussions will deepen even further thanks to the passage of the bill to amend the national referendum act.

The Supreme Court has the authority to ultimately determine the interpretation of the Constitution.  However, under Article 65 of the Constitution, I consider it only natural that the administration must appropriately interpret the Constitution in order to execute its administrative capacity.  Naturally, that is a necessary affair.

In examining the right of collective self-defense, there will be no changes to the basic stance Japan has had until now that exercise of the right of self-defense permitted under the current Constitution will be limited to the minimum necessary.  While examination of this issue is now moving forward through consultations between the ruling parties, should we decide that it is necessary to change the interpretation of the Constitution, I intend for us to take a Cabinet Decision on that.  Even if we assume hypothetically that we judge it necessary to change the interpretation of the Constitution and a Cabinet Decision is taken, it is not the case that the Self-Defense Forces would immediately be able to carry out those activities.  It would be necessary to amend laws, and so the necessary bills would be submitted to the Diet as soon as preparations were completed.

CABINET PUBLIC AFFAIRS SECRETARY: Next, I would like to take a question from someone other than the companies coordinating the press club.  Please raise your hand if you would like to ask a question.  Mr. Takeuchi, please.

REPORTER (TAKEUCHI, NIPPON TELEVISION NETWORK): I am Takeuchi with the Nippon Television Network.
I would like to inquire about the North Korea issue.
Mr. Prime Minister, as you said just now, North Korea promised to conduct a full-scale investigation, including regarding the Japanese abductees.  What points do you intend to consider in judging how effective this has been?

Also, sanctions on North Korea are scheduled to be lifted, but in a case in which North Korea did not address this matter properly, is it also possible that would you suspend the lifting of these sanctions?

In addition, as the situation progresses, are you thinking of visiting North Korea yourself?  I look forward to your answers to these questions.

PRIME MINISTER ABE: I have been watching North Korea’s diplomatic stance as a legislator ever since the KEDO agreement of 1994.  I have also been stating my opinions on negotiations between Japan and North Korea over this entire time and I have also been involved in these negotiations as a member of the government.  At the Japan-North Korea intergovernmental consultations to be held in the near future, an explanation of the organization and composition of the Special Investigation Committee is scheduled.  The government will make its determination by properly assessing this kind of information.

As for the sanctions upon North Korea, as we elicit concrete actions towards resolving the abduction issue from the North Korean side, we intend to consider our response from the perspective of what will be the most effective.  I take pride in the fact that I played a central role within the LDP in 2004 when we first made the law governing the sanctions now in place.

As I said at that time as well, sanctions become a diplomatic card, insofar as they can be used in that way when both imposing the sanctions and lifting them.  The fact is that at that time too, there was a great deal of opposition to drafting such a bill, but I believe that that has made the lifting of the sanctions now such a trump card for us.  At any rate, as I said, now we intend to judge the situation from the diplomatic point of view of what will be the most effective, and from the standpoint of generating results.

Also, as for me visiting North Korea, at the present time I have given this no consideration whatsoever.  As I said in my opening statement, my mission will never be complete until the day comes that the families of all the abductees are able to embrace their children in their own arms.  I will take on this issue grounded in this determination.

CABINET PUBLIC AFFAIRS SECRETARY: I will take the next question now.  Elaine?

REPORTER (LIES, REUTERS): I am Lies, with Reuters.  The Growth Strategy includes figures on utilizing non-Japanese, but it says explicitly that it is not an immigration policy.  Excuse me for saying this, but that may be construed by non-Japanese as a message that they should return to their home countries in the short term, after, say, five or ten years.  However, in order to revitalize the Japanese economy, and in order to counter the falling population, some also feel that immigration in the true sense will be necessary.

Mr. Prime Minister, why do you find it necessary to state explicitly that this is not an immigration policy?  Please share with us your thinking regarding the necessity of non-Japanese who reside in Japan and are able to contribute to the Japanese economy and Japanese society in the future.

PRIME MINISTER ABE: For Japan, which is facing a society with a shrinking population, I believe that it is important to call outstanding human resources to Japan in order to further revitalize the Japanese economy and boost competitiveness.  Towards this end, we intend to actively press forward with expanding the acceptance of highly-skilled non-Japanese human resources and relaxing requirements for residency.  We will also move forward in utilizing non-Japanese human resources in fields that are necessary for Japan, such as accepting human resources in the field of construction as we prepare for the Tokyo Olympic and Paralympic Games.

At the same time, I believe that care is needed for what is called accepting immigrants, in light of the various difficult experiences that other countries have had.

CABINET PUBLIC AFFAIRS SECRETARY:  Because of the time, I would like to take one final brief question.  Mr. Nakayama, please go ahead.

REPORTER (NAKAYAMA, NIHON KEIZAI SHIMBUN): I am Nakayama, with the Nihon Keizai Shimbun.

I would like to ask about “Basic Policies for Economic and Fiscal Management and Reform.”  This year’s version clearly lays out a course of reducing the corporate tax rate into the twenties over several years.  From the perspective of maintaining the targets for fiscal soundness, would it be correct to consider that as part of a set, together with the consumption tax rate being raised to 10 per cent?  Also, you explained the economic virtuous cycle.  In the process of carrying out this Growth Strategy, do you think that you will successfully prepare an environment for raising the rate to 10 per cent?

PRIME MINISTER ABE: First of all, there is no connection whatsoever between reducing the corporate tax rate and raising the consumption tax rate to 10 per cent.  We raised the consumption tax rate to 8 per cent in April this year and we are scheduled to raise it to 10 per cent in October 2015, but this is to deal with rising social security expenses or with expanding assistance for child-rearing.  At the same time, it is intended as a way to maintain confidence in Japan and contribute to putting Japan’s finances on a sound footing.

By contrast, the policy aim to reduce the level of the effective corporate tax rate is really intended to boost Japan’s competitiveness and enable Japanese corporations to survive in the global economy, and through that preserve employment opportunities.  It is also intended to enable companies to contribute to enhancing people’s lives in the context of their day to day living.

As for reforming the corporate tax, after intensive discussions by the government and ruling parties, the conclusion was reached within the Basic Policies decided today that we would aim to reduce the percentage level of the effective corporate tax rate down to the twenties over several years.  The reductions will begin from fiscal 2015.  I believe we were successful in clearly setting forth the direction for securing permanent revenues.

We will change the way the corporate tax is structured to make it more growth-oriented, and through this we will aim to secure employment and have it carry through to improve people’s daily lives.  The specific proposal for the tax rate, the tax base, and other matters will be examined as we work towards a revision of the tax system at the end of the calendar year.

At that time, I would like to engage in discussions from the standpoint of prevailing against international competition and the perspective of fiscal reconstruction.

As for the question about the environment for raising the consumption tax to 10 per cent, it is not yet possible to make any judgments on that.  Since we had extremely high growth with an annualized growth rate of 6.7 per cent this past January, February, and March, I think it is only natural that there would be a reactionary decline in demand in April, May, and June.  We expect that this is likely to fall generally within the range of our expectations, but I want for us to reach a decision appropriately, duly assessing whether or not from there, in July, August, and September, we will be able to return to our original growth track, as well as whether or not we are heading in the direction of unquestionably breaking free from deflation.

CABINET PUBLIC AFFAIRS SECRETARY: Thank you all very much.  With that, I would like to bring Prime Minister Shinzo Abe's press conference to a close.

Again, thank you all very much for your cooperation.

PRIME MINISTER ABE: Thank you very much.