- Views on Closer Cooperation with the Political Establishment and the Policy Evaluation of Major Political Parties
- Extraordinary Diet Session and General Policy Speech
- Business Integration among Regional Banks
- Rise in Long-Term Interest Rates
- Stock Price Trends
- U.S. Influence on Japan's Economic and Monetary Policy
- Regional Economic Forums
- Resignation of Chairman Katsuno of the Central Japan Economic Federation
- Agriculture, Forestry and Fisheries Minister Yana's Remarks
Views on Closer Cooperation with the Political Establishment and the Policy Evaluation of Major Political Parties
Japan faces major domestic and foreign policy challenges. The reshuffled Takaichi Cabinet has recently taken office. Overcoming these challenges requires politics centered on policy.
With that in mind, Keidanren has once again this year compiled its Views on Closer Cooperation with the Political Establishment, setting out its thinking on relations with the political sphere and on political donations. Alongside this, we have compiled our Policy Evaluation of Major Political Parties as a reference for members when they make political donations.
Extraordinary Diet Session and General Policy Speech
(In response to a question about his expectations for the debate at the extraordinary Diet session that opened today, October 5) The Basic Policy on Economic and Fiscal Management and Reform 2026, Japan's Growth Strategy, and the Strategy for the Future of Regions have each been approved by the Cabinet, and a public-private investment roadmap has also been presented. We hope to see active policy debate aimed at achieving the "strong economy" Prime Minister Takaichi is pursuing, and further progress on the many important policy issues on the agenda.
(In response to a question about his reaction to Prime Minister Takaichi's remarks in her general policy speech on securing funding for a consumption tax cut and on market confidence) Market participants are also closely watching how funding for a consumption tax cut will be secured. Although the budget formulation process will continue for several more months until year-end, we would like the government to identify the funding sources as early as possible and to explain them fully. The markets are highly sensitive, and interest rates can also fluctuate in response to other factors, so we would also like the government to continue communicating its commitment to maintaining market confidence.
(In response to a question about what measures qualify as the "orthodox approach" referred to in the general policy speech's phrase "boosting the markets' confidence in the government through an orthodox approach") In the general policy speech, the Prime Minister referred to steadily lowering the debt-to-GDP ratio, managing the primary balance on a multi-year basis, and appropriately controlling the total volume of government bond issuance over the full year. I see these remarks as examples of an orthodox approach to strengthening market confidence.
She also referred to formulating Japan's Growth Strategy Implementation Plan by year-end and drawing up a Domestic Investment Map to provide a clear picture of investment activity. These concrete initiatives reflect the policy of translating investment in growth and crisis management into economic growth in Japan, and we believe they will help maintain market confidence.
Keidanren will also work to build an "investment-driven economy" through public-private cooperation.
Business Integration among Regional Banks
(In response to a question about his reaction to the start of talks on business integration among three regional banks in the Tohoku region, and about the impact on the regional economy) We recognize that each bank's decision to begin these talks reflects a broad range of considerations, and we will closely monitor developments. The pace of population decline in the region is rapid, and I believe each bank shares a strong sense of urgency. Pooling their management resources and strengthening their business foundations across prefectural boundaries is an extremely important step toward ensuring that they can continue to fulfill their financial intermediation role, and we welcome it.
With regional banks in general facing a difficult operating environment compounded by population decline, we understand that various forms of partnership and cooperation, extending beyond business integration, are progressing. Cooperation across prefectural boundaries is important for revitalizing regional economies. We believe this latest development could provide an important impetus for such cooperation, and we hope it will lead to the revitalization and sustainable development of the region as a whole.
Rise in Long-Term Interest Rates
(In response to a question about the background to long-term interest rates rising into the 3% range, how he sees the current situation, and the points to watch going forward) I believe the global rise in interest rates is primarily driven by inflation and concerns about future inflation, reflecting factors such as the surge in energy prices associated with the situation in the Middle East.
As for Japan, I previously regarded 3% as a significant threshold. That said, the current rise in rates is a global phenomenon, and I think inflation concerns are a major factor in Japan as well.
Of course, concerns about public finances may also be contributing to the rise in Japan's long-term interest rates. Even so, taking into account comparisons with other countries and the various premiums reflected in interest rates, I do not consider the current level to be indicative of a crisis.
It is important to continue efforts to maintain market confidence and to make tangible progress. It is natural for interest rates to rise as the economy grows, but a sharp rise over a short period would not be desirable. We need to pay close attention to the pace of interest rate increases.
Stock Price Trends
(In response to a question about his reaction to the Nikkei Stock Average briefly returning to the 70,000-point range) Following the release of U.S. employment data, expectations of rate hikes receded, and investors became more willing to take on equity risk. In addition, crude oil prices stabilized somewhat, which also contributed to the rise in share prices. The fact that share prices have been on an upward trend for roughly the past year suggests, in my view, that conditions are becoming more favorable for achieving the strong economy Prime Minister Takaichi is pursuing and the investment-driven economy Keidanren is advocating.
(In response to a further question about why share prices appear to be holding up relatively well compared with the past) Despite geopolitical risks and energy challenges worldwide, strong investment and solid earnings in the AI and semiconductor sectors are driving the overall rise in share prices.
In Japan, signs are emerging of a complete exit from prolonged deflation. Although companies still have some way to go in passing on cost increases through higher prices, progress in this area is supporting solid corporate earnings, wage increases, and investment. I believe a virtuous cycle of growth and distribution is beginning to take hold.
U.S. Influence on Japan's Economic and Monetary Policy
(In response to a question about whether the U.S. is currently influencing Japan's economic and monetary policy) I believe Japan and the United States, as allies, coordinate closely not only on security but also on developments in the financial markets, although I am not aware of the details of communications between the Japanese and U.S. authorities.
In this context, it is important for Japan and the United States, as allies, to coordinate closely and appropriately on financial market matters as well, without becoming preoccupied with the definition or label of "reflationary policy." On that basis, I hope Japan will pursue its own economic and monetary policies.
Regional Economic Forums
(In response to a question, in his second year in office, about how he intends to approach the exchange of views with the regional business community at the Regional Economic Forums) In my first year, I focused in particular on communicating the importance of establishing an investment-driven economy. This fiscal year, my second year in office, with many policy challenges to address, I intend to continue communicating Keidanren's initiatives while broadening my own perspective through closer exchanges with the regional business community to further deepen my understanding of conditions in regional economies, including prices, labor shortages, and spring labor-management negotiations and consultations.
Resignation of Chairman Katsuno of the Central Japan Economic Federation
(In response to a question about his reaction to the resignation of Chairman Katsuno of the Central Japan Economic Federation and the series of improprieties at Chubu Electric Power) The incidents at Chubu Electric Power are extremely regrettable. Under its new management team, we would like the company to overhaul its governance and corporate culture to prevent a recurrence and steadily regain public trust.
The importance of moving forward with nuclear power plant restarts to utilize nuclear energy remains unchanged. With this in mind, we would like Chubu Electric Power to restore public trust and to make steady progress in its electricity business.
Agriculture, Forestry and Fisheries Minister Yana's Remarks
(In response to a question about his reaction to the series of news reports prompted by Agriculture, Forestry and Fisheries Minister Yana's remarks on budget allocations for roads) I am aware of the reports, but I do not have detailed information, including on the facts of the matter, so I would prefer not to comment.