Japan’s prime ministerial candidate Motegi aims to craft new stimulus package By Reuters

By Leika Kihara and Makiko Yamazaki

TOKYO (Reuters) – Japan’s ruling party official Toshimitsu Motegi said on Wednesday he would like to draw up a comprehensive stimulus package to ensure continued economic recovery as he threw his hat into the ring to lead the party.

Such a move would follow measures drawn up last November to cushion the blow from inflation with a spending spree of more than 17 trillion yen ($117 billion), a move that could worsen Japan’s already battered finances.

“I will make sure that in half a year the conditions will be met where we can officially declare the end of deflation,” Motegi told a news conference, declaring his candidacy for the party leadership later this month.

Because Japan’s Liberal Democratic Party (LDP) controls parliament, its leader becomes prime minister.

In that role, Motegi said, he would pursue a growth strategy that would help the government pay for policies, such as expected higher defense costs, without raising taxes.

He would also assume nominal economic growth of around 2.5% for now, followed by growth above that level to keep real wages in positive territory.

However, Motegi was cautious about raising Japan’s financial income tax, saying it was “not the right political direction”.

Now general secretary of the PDL, Motegi has held many cabinet portfolios, from foreign affairs to trade and economy.

Although recent polls show him not on a crowded list of expected candidates for the party’s leadership race, some analysts see him as a potential finance minister in a new government.

(1 USD=145.2100 yen)