Government to consider steps on utility bill burden
Ideas include payouts, subsidies to ease pain - Nikkei
Steps to curb utility bills seen affecting BOJ forecasts
PM under pressure to ease pain from weak yen, inflation
TOKYO, Sept 29 (Reuters) - Japan will consider more
steps to cushion the blow of rising electricity bills, a
government spokesperson said on Thursday, underscoring the
pressure it faces in addressing the burden on households of
higher prices for imports from a weak yen.
Electricity bills have risen about 20% in the past year for
households and by about 30% for businesses, Chief Cabinet
Secretary Hirokazu Matsuno told a briefing, adding that such
increases were becoming a "heavy burden" for consumers.
"We'll scrutinize developments of electricity bills and
consider whether further steps could be necessary," he said.
The remarks came after the Nikkei newspaper reported on
Thursday the government may offer cash payouts to households and
firms, as well as subsidies for utilities to ease the pain from
rising electricity bills.
The Nikkei said Prime Minister Fumio Kishida may announce
his resolve for "unprecedented, bold measures" to directly
reduce the burden in a speech to parliament on Monday.
Kishida is also likely to announce that Japan will set an
inbound tourism spending target of more than 5 trillion yen ($35
billion) a year, the Nikkei reported.
The government is expected to announce a package of measures
to cushion rising inflation next month, which is likely to be
funded by another supplementary budget.
Kishida's administration has seen its approval rating slide,
partly because of public discontent over the rising cost of
living, as recent sharp falls in the yen push up prices of
imported fuel and food.
Underscoring policymakers' worries over damage to growth
from the sliding yen, authorities intervened in the foreign
exchange market last week to prop up the yen for the first time
Any government steps to curb electricity bills would likely
affect the Bank of Japan quarterly inflation projection due next
month, which is closely watched for clues on how soon the
central bank may whittle down its massive stimulus.
"If the government does take steps to curb utility bills,
that will put some downward pressure on consumer inflation,"
said Toru Suehiro, chief economist at Daiwa Securities.
"But core consumer inflation is still likely to exceed 2.5%
and approach 3% through the March end of this fiscal year, and
may not slow much thereafter," he said.
While Japan's inflation is much lower than that in other
advanced economies, core consumer inflation quickened to 2.8% in
August, exceeding the central bank's 2% target for a fifth
month, as the weak yen pushed up the price of imports.
BOJ Governor Haruhiko Kuroda has ruled out raising Japan's
ultra-low interest rates any time soon, arguing that core
consumer inflation would ease back below 2% next fiscal year
when cost-push factors dissipate.
($1 = 144.3100 yen)
(Reporting by Leika Kihara and Takahiko Wada; Additional
reporting by Elaine Lies and Kantaro Komiya; Editing by Jamie
Freed and Richard Pullin)