Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

(Abridged)

REPORTER: I have a question regarding the Nikkei Stock Average. Today, it closed at 16,017 JPY. The Nikkei average, which yesterday was down to its lowest level in one year and three months since the Bank of Japan (BoJ) decided on its additional easing, has continued to decline. Can you please share your comments concerning this?

CHIEF CABINET SECRETARY SUGA: First of all, since the beginning of this year, the stock market movements in China and the United States as well as falling crude oil prices have caused Japanese stock prices to also fluctuate. The world economy as a whole, however, is seeing a moderate recovery. With regard to the prospects, we expect that the recovery of the U.S. and other economies will continue, and that this will sustain the current moderate recovery. The Government considers it important that the FY2015 supplementary budget is executed swiftly, while coordinating with the G7 and the rest of the international community and paying close attention to the domestic and overseas situations, without letting market fluctuations cause any confusion. As for the Japanese economy, as I have stated previously, corporate profits are at an all-time high, the returns on equity of major companies are increasing, and the employment and income situations have continued to improve. I perceive that the Japanese economy has strong foundations. Furthermore, as far as the people’s lives are concerned, the fall in crude oil prices is basically leading to decreases in utility costs and reductions in gasoline prices. The effects are positive for Japan’s real economy. In any case, we will pay close attention to the situation while giving adequate consideration to the slowdown of emerging economies—one of the causes of falling stock prices, and as I mentioned earlier, while coordinating with the G7 countries.

REPORTER: I have a related question. You just stated that low crude oil prices or falling crude oil prices lead to lower utility costs and other positive effects on the real economy. This, on the other hand, is also one of the factors that lead to keeping overall prices down. Yesterday, you stated that Governor Kuroda of the BoJ said it would not hesitate to take measures, including additional easing, if there are changes to the price trend and the measures are necessary to achieve the 2% price stability target. You stated that the Government would follow the situation in close coordination with the BoJ. By this did you mean that the Government expects the BoJ to implement additional easing at this timing?

CHIEF CABINET SECRETARY SUGA: That is not what I meant. The BoJ has said two things in regard to the conduct of monetary policy—that it will constantly examine both upside and downside risks to economic activity and prices, and that it will not hesitate to make adjustments if they are necessary to achieve the 2% price stability target. As the BoJ has made these intentions known, I consider that the concrete monetary policy approaches should be entrusted to the BoJ. I imagine that in this context the BoJ is also closely following the situation. What I stated now is the policy that has existed from before.

(Abridged)