Three op-eds this week look closely at the nation's issues,
and the steps the government could take to improve matters.
First, William Pesek focuses on the soaring government
bond yields in a country with a debt-to-gross domestic product ratio of
around 260%. While acknowledging yields are rising globally, he is worried that
the political winds in Tokyo are blowing toward budget-busting tax cuts or
extra government spending.
"On any list of economies testing fiscal fate, Japan
deserves a place at the very top as it flirts with ill-timed fiscal loosening.
As the so-called bond vigilantes pounce from New York to Paris to London, Tokyo
must be extremely careful," Pesek writes.
"To escape 1999, Japan needs bold steps to revive its
animal spirits, not a fresh debt surge that triggers the next bond
crisis."
Next up, Krishna Srinivasan, director of the Asia and
Pacific Department at the International Monetary Fund, says that it is
imperative that market confidence in Japan is anchored by sound and credible
macroeconomic policies.
Perhaps aimed at whoever becomes the next prime minister,
Srinivasan argues that any fiscal support should be targeted, with the aim
of helping the most vulnerable segments of the population, and, more
importantly, temporary, until inflation eases.
"Generalized subsidies and tax cuts do not fit these
principles as they benefit the rich and poor alike, are difficult to roll back,
and will constrain resources that will be needed to respond to the mounting
costs of natural disaster and aging. They could also add to inflationary
pressures," he writes.
Finally, a Nikkei editorial says that Japan risks
losing its international standing should it return to the kind of rapid
turnover of prime ministers it has seen in the past, and calls for a
"steadfast leader."
"The Ishiba administration should not be remembered in
the future as a prelude to an age of political confusion in Japan. The country
has entered an era forested with many parties in the political mix, but no
mechanism for forging agreements between them is in sight," the editorial
board writes.
"Ruling
and opposition parties must understand that Japan is standing at a key juncture
-- whether the nation can rebuild its democracy or not depends on them."
Courtesy: Nikkei Asia
