Prime Minister Fumio Kishida said Thursday that Japan is "still halfway" to ending deflation, pledging to continue implementing measures to achieve a virtuous cycle of wage and price rises.
"Whether we seize the opportunity to overcome deflation or regress depends on what kind of steps we take," Kishida said at a press conference after the budget for the next fiscal year starting April was enacted in parliament earlier in the day.
Kishida said the government will carry out tax cuts and necessary policies to push up wages for employees of smaller companies at home in a bid to realize disposable income growth among the public.
His remarks came after the Japanese Trade Union Confederation said in a preliminary survey in March that domestic firms agreed to wage increases averaging 5.28 percent at this year's negotiations with labor unions, the sharpest climb in more than 30 years.
On March 19, meanwhile, the Bank of Japan scrapped its negative interest rate policy in its first rate hike in 17 years, overhauling the central bank's unorthodox monetary easing framework of the past decade designed to end the nation's deflationary cycle.
