Japan’s incoming PM Ishiba calls for need to end deflation

By Leika Kihara and Makiko Yamazaki

TOKYO (Reuters) – Japan’s incoming prime minister Shigeru Ishiba on Friday stressed the need for the country’s economy to fully emerge from deflation.

Revitalising consumption is key for Japan to emerge from economic stagnation, he said, adding the new administration must consider the most effective means to cushion the blow to households from rising inflation.

Ishiba made the comment in a news conference after winning the ruling party’s leadership race, which de-facto makes him next prime minister due to the party’s dominance in parliament.

“I will ensure Japan emerges from deflation,” he said, promising to accelerate Prime Minister Fumio Kishida’s policies aimed at boosting household income through wage hikes.

The yen bounced on Friday, recovering earlier losses, after Ishiba, former defence minister seen as a critic of past aggressive monetary stimulus, won the ruling Liberal Democratic Party’s leadership contest.