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Former Olympics minister Shunichi Suzuki is set to be named Japan’s next finance minister, according to local reports, replacing Taro Aso, who has held the post longer than anyone in the country’s modern era.
Suzuki, a ruling party lawmaker who nominated Fumio Kishida in his successful bid to become prime minister, is Aso’s brother-in-law and the son of a former premier.
Economists said Suzuki’s appointment to one of the government’s most powerful posts would likely reinforce the policy status-quo for the world’s third-largest economy.
“It’s unlikely there’ll be a major shift in the ministry’s direction because of this,” said economist Takashi Miwa at Nomura Securities Co. “There was some speculation that Kishida may move toward a fiscal tightening direction, but Suzuki is unlikely to act in that way any time soon.”
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Kishida, after being elected party leader Wednesday, said he wanted to appoint younger lawmakers to key positions, in a likely appeal to the public ahead of a general election that must be held this autumn. Suzuki, 68, will replace an 81-year-old Aso.
At what is likely to have been one of his last press conferences as Japan’s top finance official, Aso on Friday told reporters he was aware of the reports he was being replaced. He declined to respond to questions about the legacy he leaves after nearly nine years in the post.
In the short-term, Suzuki will inherit a raft of issues that include getting Japan’s Covid-hit economy back onto a solid recovery track and budgeting for an economic stimulus package that Kishida has said will be in the 10s of trillions of yen.
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Further out, Suzuki will face the perennial problem of what do about Japan’s growing mountain of debt. The country’s aging population has caused social security spending to balloon, contributing to a debt-to-GDP ratio that reached nearly 240% last year.
Kishida has talked about distributing wealth more equitably, and seeking to jump-start a virtuous economic cycle by raising public sector wages.
On Wednesday, he singled out nurses, caregivers to the elderly and kindergarten workers as having too low a wage, signaling he’ll attempt to boost their paychecks. If that comes to pass, one of Suzuki’s jobs would be securing the necessary funds.
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To boost revenues, Aso oversaw two hikes in the sales tax that doubled it to 10%. Suzuki last year, during the pandemic, argued against calls to reverse some of those increases, according to local reports.
Given Kishida’s support for the Bank of Japan’s 2% inflation target and the unlikelihood he’ll push for any short-term changes in monetary policy, Suzuki probably won’t have to contend with rising bond yields as he stewards Japan’s finances for the time being.
Suzuki will likely make his first mark on the global stage at International Monetary Fund meetings this month in Washington D.C., where policy makers will try to make further progress on an international tax deal
(Updates with Aso comments.)
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