Japan opposition pledges 2% inflation accord
Reuters and AP
November 22, 2012, 12:00 am TWN
TOKYO -- The opposition Liberal Democratic Party (LDP), tipped to finish first in Japan's parliamentary election, pledged on Wednesday to compile a large extra budget and push the central bank to ease its already loose monetary policy to rescue the economy from recession.
The party also promised to boost spending on maritime defense, defend Japan's territory and ease restraints on the military imposed by the pacifist constitution. Those positions could further inflame ties with Beijing, already frayed by a feud over tiny, uninhabited islands now controlled by Tokyo, known as the Senkaku in Japanese and Diaoyu in China.
Monetary policy, along with diplomacy and security matters, has emerged as a focal point of the Dec. 16 election — the first since Prime Minister Yoshihiko Noda's Democratic Party of Japan (DPJ) surged to power in 2009.
Three years and three prime ministers later, opinion polls show disappointed voters are likely to give the LDP the biggest number of seats in parliament's lower house.
The LDP's platform calls for setting a 2-percent inflation target under a accord between the government and the Bank of Japan (BOJ), as well as the possible revision of the BOJ law, which guarantees the central bank's independence, to "strengthen cooperation" with the government on policies.
The document also said an LDP government would consider creating a public-private sector fund to buy foreign bonds.
But it made no mention of LDP leader and ex-premier Shinzo Abe's proposal that the BOJ should directly underwrite bonds issued for public works projects. Noda says that idea threatens the central bank's independence.
Reflecting the party's generally pro-nuclear power stance more than 18 months after the Fukushima nuclear disaster, the LDP said it would decide within three years about whether to restart idled nuclear power plants. Public fears about safety have grown since the March 2011 disaster, sparking large demonstrations against restarts.
The LDP also said it would look at establishing a permanent presence on uninhabited Tokyo-controlled islands at the — of a dispute with China.
The main opposition party also promised a review of the self-imposed ban on defending allies, offering the possibility of Japanese troops returning fire if U.S. forces come under attack.
The document said the party "will clarify the rights of self-defense, including collective self-defense, and then will legislate basic law on national security."