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Measures Taken by the Obuchi Administration to Revive the Japanese Economy

June 1999

Since taking office, Prime Minister Keizo Obuchi has taken all available measures to revive the Japanese economy in a swift and bold manner, centering on the demand side of the economy.

  • Large-Scale Economic Stimulus Measures
    - Emergency Economic Package totaling 27 trillion yen (including more than 9 trillion yen in tax reductions) in November 1998 to improve infrastructure, reduce taxes, deal with rising unemployment, and support small and midsize enterprises
    - Early passage and implementation of the FY 1999 budget containing high levels of public expenditure
  • Easing of Monetary Policy by the Bank of Japan
    - The inducement of short-term interest rates to the lowest possible level by providing an ample money supply
  • Stabilization of the Financial System
    - Enhancing the capital base of financial institutions (injection of 7.5 trillion yen in public funds into 15 major banks)
    - Placing financial institutions that are in danger of insolvency under public management
These measures have begun to take effect, and the economy generally appears to have ceased deteriorating.
  • Consumer and corporate sentiment is on the upswing, as demonstrated by higher figures for housing starts and fewer bankruptcies
  • Public works projects are progressing smoothly
  • Financial markets are regaining confidence, as shown by higher share prices and the disappearance of the "Japan premium"
To enhance the competitiveness of Japanese industry, structural reforms have also been advanced on the supply side of the economy.

Employment measures have been taken to ensure that structural reforms, which could have an adverse impact on job security and income levels, do not nip the nascent recovery in the bud.
  • Improvement of the business environment to encourage corporations to restructure their operations in clearing the negative legacy of the bubble economy and adapting to the rapid advance of globalization and information technologies
    - Promoting reorganization (through M&As, divestiture, etc.) by amending laws and regulations governing corporations
    - Helping create new industries and businesses through deregulation
    - Enhancing labor mobility and making qualitative improvements in human resources
    - Promoting technological innovation and shoring up IT capabilities
  • Pooling of public- and private-sector wisdom through the Industrial Competitiveness Council
  • Announcement of new Emergency Employment Measures and Industrial Competitiveness Enhancement Measures on June 11 (see attachment)

Utmost efforts have been made to achieve positive economic growth in fiscal 1999 and to steer the economy toward a full-scale recovery.

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