Japan's Ruling Party Leadership Race: Policy Debates Heat Up

Sanae Takaichi, a prominent candidate in Japan's ruling party leadership race, emphasizes the need for maintaining ultra-low interest rates to support economic recovery. As the LDP prepares to elect a new leader, debates arise over fiscal strategies amidst rising living costs. The election's outcome will replace Prime Minister Fumio Kishida.

Sanae Takaichi, Japan's minister in charge of economic security and a prominent candidate in the ruling party's leadership race, advocates for the continuation of ultra-low interest rates to bolster the country's fragile economic recovery. Takaichi argued at a news conference that it was premature to raise rates.

Her comments align with earlier statements made on her YouTube channel stressing the importance of maintaining fiscal and monetary support. The Bank of Japan (BOJ) had ditched negative interest rates in March and raised short-term rates to 0.25% in July, aiming to achieve a 2% inflation target.

The Liberal Democratic Party (LDP) will elect a new leader on September 27 to succeed incumbent Prime Minister Fumio Kishida. Most candidates are calling for spending packages to mitigate rising living costs. However, different fiscal strategies are also being proposed by candidates like Taro Kono and Toshimitsu Motegi.

(With inputs from agencies.)