Kishida unveiled a 17 trillion yen ($174 billion) stimulus program in November to help low-income families hit by inflation through one-time tax cuts.
“Economy, economy, economy. I will focus my attention on the economy more than anything else,” the Prime Minister said. “Wage increases do not exceed inflation. This is the biggest challenge facing us.”
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In his address to voters, Kishida said his country could not miss the opportunity to shift from a “cold temperature economy”, based on cutting costs, to a “right temperature economy”, based on increased investment.
“The Japanese economy has reduced investment in people and wages, as well as investment in the future through capital investment and investment in research and development, which has led to stagnant consumption and investment,” he said.
But these measures have failed to generate significant public support for the leader, who is also facing multiple scandals over fundraising and his Liberal Democratic Party's ties to a religious sect, the Unification Church.
The last poll, conducted by Nikkei TV in Tokyo in January, showed his government's approval rating at 27 percent – just one percentage point higher than the record low of 26 percent in December.
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Analysts have pinned some hopes on spending bouncing back in the post-coronavirus tourism boom, but other services are struggling to maintain their competitiveness. Digital innovation in Japan has also stalled. After becoming one of the world's leading innovators of the 20th century, it has become increasingly dependent on digital service providers abroad.
The IMD World Digital Competitiveness Ranking found that Japan's position fell from 23rd out of 64 countries in 2019 to 32nd last year.
Another obstacle is a shortage of highly skilled IT workers, who are essential for transforming companies to become less labor-intensive, said Shigeto Nagai, a Japan analyst at Oxford Economics.
“A serious shortage of IT workers in Japan persists, leading to a widening gap between ambitious software investment plans and actual implementation,” he said.
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