Japan’s Premier Hopeful Kato Advocates for Stimulus and Doubling Household Income

TOKYO (Reuters) – Katsunobu Kato, a former health minister and a candidate in the ruling party leadership election, has proposed the creation of a stimulus package aimed at increasing domestic investment and revitalizing local economies.

During a news conference where he declared his intention to compete for the leadership role currently held by Prime Minister Fumio Kishida, Kato emphasized the need to double household incomes through wage increases to facilitate a consumption-driven economic recovery.

"Japan is on the brink of overcoming deflation. We should not halt this progress, but rather accelerate it" by focusing on wage growth and capital investment, Kato stated while announcing his candidacy for the Liberal Democratic Party (LDP) leadership on September 27.

The victor of the LDP leadership race, anticipated to take place on September 27, will likely become the next prime minister, given the party’s parliamentary majority.

In his campaign, Kato expressed his goal of encouraging companies to redirect their significant reserves towards capital spending and employee wages.

"Robust consumer spending would foster competition, enhancing the profit-making capabilities of companies. This, in turn, would lead to further wage increases," he remarked, outlining a strategy akin to that of the current prime minister’s policies.

Although Kato is currently less popular than other candidates for the prime minister position, analysts suggest that his extensive experience in key governmental roles may position him as a strong contender for the finance minister role.