Two-thirds of Japan firms support PM Takaichi's economic policies: Reuters poll

Two-thirds of Japan firms support PM Takaichi's economic policies: Reuters poll TOKYO, Sept 10 : More than two-thirds of Japanese firms support Prime Minister Sanae Takaichi's economic policies, backing the government's push to spur investment in AI, semiconductors and other areas of strong growth potential, a Reuters survey showed on Thursday. The share of Japanese companies that want Takaichi to remain at the helm beyond her current term far exceeds those that don't want her to stay on, the poll also showed. Takaichi's first economic blueprint, compiled in July, says the government will seek to work with the private sector to channel resources into strategic industries, with combined public and private investment projected to exceed 370 trillion yen ($2.4 trillion) through fiscal 2040. Seven percent of respondents strongly approve of Takaichi's economic policies and 61 per cent somewhat approve, while 30 per cent do not view them very favourably, the poll showed. Among respondents who support Takaichi's economic policies, 70 per cent picked her growth strategy centred on proactive investment as their favourite policy measure, while 49 per cent chose energy subsidies and other steps to fight inflation. The question allowed multiple answers. Among those who do not support Takaichi's economic policies, 68 per cent selected her flagship plan to cut the sales tax on food items to 1 per cent from 8 per cent for two years as a step they do not endorse. "I do not approve of it at all," a manager at a chemical company wrote in the survey. "I think it will balloon national debt and weaken the yen, which will in turn push up crude oil prices, fuel inflation and cancel out the tax cut's benefits." Takaichi, who advocates responsible and proactive fiscal policy, has said the government aims to avoid relying on additional deficit-financing bonds to fund Japan's first-ever sales tax cut. On Takaichi's tenure, 46 per cent of respondents hope she will stay on beyond the current term that effectively ends in a year, while 18 per cent do not want her to remain in office beyond that point, the survey showed. The remaining 36 per cent have no clear preference on the matter. Takaichi's term as head of the Liberal Democratic Party (LDP) will come to an end in September 2027. The winner of the election to select the next party leader will be all but assured of becoming prime minister as the LDP commands a strong majority in parliament's lower house, which has the final say in choosing the premier. The poll was conducted by Nikkei Research for Reuters from August 26 to September 4. Nikkei Research contacted 510 companies, of which 224 responded on condition of anonymity. The survey also showed 31 per cent of respondents find it desirable for the yen to trade between 150 yen and 159.99 yen per dollar, while 25 per cent prefer 140-149.99 yen and 11 per cent favour 130-139.99 yen. The yen firmed sharply in recent sessions amid growing expectations of a faster pace of interest rate hikes by the Bank of Japan. The Japanese currency was trading around 153.58 yen to the dollar on Wednesday afternoon. The central bank is widely expected to raise its policy rate to 1.25 per cent from 1 per cent, already a 31-year high, when it meets on September 17-18. ($1 = 153.58 yen)