Japan plans a ￥96.7 trillion (US$797 billion) budget for the fiscal year starting in April to support the nation’s economy as rising tax revenue reduces the need to issue new bonds.
The Japanese government and the ruling coalition parties approved the budget proposal, Japanese Minister of Finance Taro Aso told reporters in Tokyo yesterday.
Tax revenue is projected to rise to ￥57.6 trillion, the most since fiscal 1998, while new bond issuance is forecast to fall to ￥34.4 trillion, the lowest since fiscal 2009.
The bond issuance is to cover 35.6 percent of the proposed budget, which is the lowest since fiscal 2008.
The budget plan shows that Japanese Prime Minister Shinzo Abe’s strategy has been somewhat successful in reining in the world’s biggest debt burden with economic revitalization. An increase in the sales tax last year boosted revenue, and Abe plans to raise it again in April 2017 while reducing taxes for companies in a bid to aid their competitiveness.
“Fiscal rehabilitation is making steady progress,” Dai-ichi Life Research Institute lead economist Hideo Kumano said. “A higher sales tax does hurt the economy, but the budget numbers today [yesterday] tell us that it doesn’t break the economy. A sales tax bump is a wild card to rebuild finances.”
The government on Friday last week announced a ￥3.5 trillion supplementary budget for the current fiscal year ending in March, with about a third set aside for initiatives including demographics issues, providing money for low-income pensioners and regional revitalization. The extra budget is to be funded by increased tax revenue and surplus funds from the previous fiscal year.
Japan’s annualized GDP expanded 1 percent in the quarter ended Sept. 30 from the previous period, according to revised figures, avoiding a recession as previously thought.
The Bank of Japan on Friday kept its main monetary stimulus target unchanged, while outlining operational changes for its purchase of government bonds, exchange-traded funds and real-estate investment trusts.
From India to China to the US, automakers cannot make vehicles — not that no one wants any, but because a more than US$450 billion industry for semiconductors got blindsided. How did both sides end up here? Over the past two weeks, automakers across the world have bemoaned the shortage of chips. Germany’s Audi, owned by Volkswagen AG, would delay making some of its high-end vehicles because of what chief executive officer Markus Duesmann called a “massive” shortfall in an interview with the Financial Times. The firm has furloughed more than 10,000 workers and reined in production. That is a further blow
Answering to a reported request by Germany to help address a chip shortage in its auto industry, the Ministry of Economic Affairs (MOEA) yesterday said that it was in talks with domestic chip suppliers. Foreign media over the weekend reported that German Minister of Economic Affairs Peter Altmaier had sent a request to Taipei to ask Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to cooperate more closely with German automakers to provide microchips and sensors, to bridge a shortage that has emerged over the past few months. The MOEA said that it had not yet received the request and could therefore not elaborate
FOCUS ON FOUNDRIES: An analyst said that some investors would be disappointed because they were expecting a larger announcement of a partnership with TSMC Intel Corp’s incoming chief executive officer Pat Gelsinger on Thursday pledged to regain the company’s lead in chip manufacturing, countering growing calls from some investors to shed that part of its business. “I am confident that the majority of our 2023 products will be manufactured internally,” Gelsinger said. “At the same time, given the breadth of our portfolio, it’s likely that we will expand our use of external foundries for certain technologies and products.” He plans to provide more details after officially taking over the CEO role on Feb. 15, but Gelsinger was clear that Intel is sticking with its once mighty
AWARENESS NEEDED: The central bank urged lenders to know their customers before undertaking business for them and to seek funding in conventional ways The central bank yesterday said that it would take action against four foreign lenders for their involvement in helping companies trade in the deliverable forward market in contravention of foreign-exchange regulations. Some grain merchants newly based in Taiwan have since July 2019 been practicing questionable currency-trading activity, with the help of branches and subsidiaries of six foreign banks, the monetary policymaker told an unscheduled news conference. Affiliated firms as of July last year completed currency-related deals they referred to as trading that totaled US$11 billion, which was not in sync with their real business needs, the central bank said after wrapping up