Japan business lobbies back PM Abe to revive faltering economy

TOKYO (AFP) - Major business lobbies in Japan on Monday backed the efforts of Prime Minister Shinzo Abe to revive the faltering economy and urged him to commit to a Pacific-wide free trade deal.

"The landslide victory of the Liberal Democratic Party (LDP) led by... Abe shows people's desire for the government to restore the economy as they have a sense of stagnation," Chairman of the Japan Business Federation Hiromasa Yonekura told a press conference of three major business lobbies.

"It is very reassuring that he is aggressively tackling the issue of rebuilding the economy. We want to fully support him," said Mr Yonekura, also the chairman of Sumitomo Chemical.

The endorsement is the latest vote of confidence in Mr Abe by Japan's business community. Stocks have soared since his victory last month and the sky-high yen has tumbled as investors back his tough talk on forcing aggressive monetary easing measures from the Bank of Japan.

Japan is stumbling into it's fifth recession in two decades, a period that has been marked by stagnation and debilitating deflation.

Mr Yasuchika Hasegawa, head of the Japan Association of Corporate Executives, said it was too early to say whether or not Mr Abe's fiscal largesse, which has seen pledges of huge new stimulus spending, would pay dividends, but the signs were good so far.

"The market reacted positively even before the launch of the Abe administration," he said. "This is a good sign and I hope he will steadily carry out policies to avoid a fracturing of the economy," said Mr Hasegawa, also Takeda Pharmaceutical's CEO.

Mr Abe earlier on Monday pledged he would look to revive the slowing economy with much-clamoured-for reform of regulations and by backing innovations that would help manufacturers regain their edge.

"I will set up a conference on industrial competitiveness, so as to mobilise wisdom of both the government and the private sector," he said.

He also said he will create two other public-private joint conferences, on regulatory reforms and technological innovations, calling them "the key to industrial competitiveness".

Business chiefs welcomed the moves but said they would like Mr Abe to make an early announcement committing Japan to participation in a US-backed Pacific-wide free trade deal, known as the Trans-Pacific Partnership (TPP).

"I strongly hope that Prime Minister Abe visits the United States soon and express Japan's will to join the talks," Mr Yonekura said.

Mr Abe said his government will concentrate resources on potential growth areas including one that is linked to "clean and potentially self-sufficient energy generation" and agriculture.

"I believe agriculture is a growth area," Mr Abe said.

"In agricultural trade, price levels are going up. But to my regret, Japan has not expanded its share despite the fact that we have safe and delicious food. I want to transform our agriculture into an industry that can export to the world," Mr Abe said.

The TPP is a touchy matter for Japan's cosseted farmers, who object to any liberalisation of the market and provide the backbone of rural support for Mr Abe's LDP.