Japanese ruling official reassures on future spending and stimulus plan

With yields on long-term Japanese government bonds at seven-month highs due to concerns about the country’s debt mountain, investors are keen to know if politicians are planning further steps to stimulate the economy and woo voters ahead of a looming election. In a timely interview on June 4, the secretary-general of the Liberal Democratic Party (LDP), Hiroyuki Hosoda, told Reuters that the government believes the economy has stabilised and no extra stimulus measures are needed for now. Market players are equally keen for clues to the outcome of the election due by September, which could bounce the long-ruling LDP from power and ease a policy deadlock in parliament. In a startling admission, Hosoda said the ruling bloc could well lose 90 of the 334 seats it now holds in the 480-strong lower house of parliament, losing the two-thirds majority that allows it to enact bills rejected by an opposition-controlled upper house. The Japanese-language version of the Reuters report was a huge hit on reuters.co.jp, where it was featured on a special political page.