Prime Minister of Japan Shinzo Abe has announced the main points of the new plan for economic stabilization. The reaction was immediate. The stock indices fell by almost 4%, while his speech was broadcast. Although this document is only getting prepared for the Cabinet’s approval, it has already extended a huge influence onto the major indicators of the economy. The stock market participants' distrust provokes the decline of the key indices. For example, Nikkei and Topix closed down 3.8% and 3.2% correspondingly. Besides, the 30-year state bond yield has increased to 1.80%. These stabilization measures are aimed at different sectors.
First of all, the government will update the scheme of pension funds functioning. Now these organizations will have an opportunity to invest not only in the government bonds, but also in various assets. The additional financing will contribute to indices rates. Furthermore, Japan's authorities are planning to create special economic areas in order to attract foreign capital and encourage the business activity in the country. They are also intending to boost the volume of private investment in the infrastructure with the help of some tax exemptions. In his address, Shinzo Abe also stressed the need for expanding the size of farming industries and women involvement in all economic fields. The government has assured the nation that average growth rate of income will be at least 3%, which is 1% more than the target inflation level set by the central bank of Japan.
