Japan's main opposition Liberal Democratic Party (LDP) on Wednesday vowed to rescue Japan from its economic slump by reversing deflation and boosting economic growth by at least 3 percent, as well as focusing more resources on defense.
As part of the LDP's election campaign platform unveiled on Wednesday, the party pledged to modify the government's accord with the central bank to ensure more aggressive monetary stimulus, with the LDP's sights set on achieving a target of 2 percent inflation.
"We would proceed with a new growth strategy to stimulate the economy and to correct a prolonged yen rise and deflation. We would also seek monetary easing exceeding the scale of the anti- deflation measures taken when we were in power," the LDP Chief and former Prime Minister Shinzo Abe told a news conference.
Abe went on to say that his party, hotly tipped to oust the ruling Democratic Party of Japan (DPJ) in a general election to be held on Dec. 16, will work towards closer ties with the Bank of Japan (BOJ), with an aim to unrolling more aggressive monetary easing measures.
Comments made by Abe earlier in the week had led critics to believe that he was planning to make the government's relationship with the central bank less independent, but Abe set the record straight on Wednesday saying that he planed to preserve the BOJ's independence.
"I meant the BOJ will buy the construction bonds from the market and this does not necessarily mean the BOJ will directly buy the bonds from the government," said Abe, adding that his plans for between a 2 and 3 percent annual inflation rate would involve him taking council from "experts".
The LDP's new policy accord with the central bank is being interpreted by economists as a stepping stone to the government leaning harder on the BOJ to unroll further stimulus measures to boost Japan's ailing economy.
Data released by the government earlier Wednesday showed that Japanese exports have declined for a fifth straight month, following waning demand in debt-plagued Europe and a slumping demand in China, Japan's largest trading partner.
Exports dropped 6.5 percent in October from a year earlier, with exports to China falling 11.6 percent as a territorial dispute between Tokyo and Beijing, intensified by Japan's illegal "nationalization" of the Diaoyu Island in the East China Sea, has caused Chinese consumers to boycott some Japanese products and services.
Abe, who will likely succeed Noda as the nation's prime minister following the upcoming election, has said he is mindful of the fact Japan is heading towards a recession under the current government and said he planned to get the economy back on track.
"We will take back Japan," the 58-year old political veteran said. "This is our campaign pledge and we only listed things we can achieve," he said, adding that the DPJ had failed to live up to its lofty campaign pledges since it swung to power in 2009.
Along with monetary policy, the LDP's campaign also focuses on issues of diplomacy and security.
Abe said he wants to change the current Self-Defense Forces' status to a national self defense force, to address a shifting security environment in the Asia Pacific region and increase maritime defense spending in particular.
Such notions, observers said, will likely further strain diplomatic ties with Japan's neighbors, including China and South Korea, both of whom Japan is currently involved in territorial disputes with.
"The platform is aimed at recapturing the public's trust in Japanese politics," Abe said of his party's stance. "We will resolutely protect Japan's territorial land and waters," he added.
The LDP, if they regain power in the lower house election, also plan to imminently restart fueling activities in the Indian Ocean for Japan's military allies. Such refueling missions were halted in January 2010.
According to the latest polls, the public favor the LDP over the DPJ by 10 percent, but the consensus among political pundits is that neither party will win an outright majority in the lower house election, but the LDP and a smaller coalition party will prevail in the lower house vote and bring an end to the DPJ's three year reign.
The LDP's election campaign will remain staunchly opposed to Japan's participation in the US-led Trans-Pacific Partnership free trade talks, officials said, if the agreement involves the elimination of tariffs across all sectors.
On nuclear policy, the LDP said it will make a decision within a three year time frame on whether or not to restart Japan's nuclear reactors, most of which were idled in the wake of the earthquake and tsunami-triggered nuclear crisis in Fukushima Prefecture last March.