[Title] Press Conference by Prime Minister Kishida

[Opening statement]

First of all, before beginning this press conference, I wish to extend my heartfelt condolences to those who lost their lives in the tourist boat accident that occurred off the coast of Shiretoko, Hokkaido on the 23rd and send my heartfelt sympathies to their family members.

With 15 people still unaccounted for, the relevant ministries and agencies will continue to do their very utmost in their search and rescue operations.

We are also working to ensure both safety and peace of mind. In addition to an extraordinary inspection of the business operator that caused this accident, beginning yesterday, each transport bureau nationwide is now simultaneously conducting emergency safety inspections of all passenger ship operators.

Just now we took a decision on comprehensive emergency measures to address soaring crude oil and commodity prices and related matters. Today, I will address you regarding how we will manage economic and fiscal matters based on the current situation, focusing on these measures.

The impact of COVID-19 on people's daily lives and on the economy continues to be felt even now. Against that backdrop, Russia's aggression against Ukraine and other factors have resulted in increased uncertainty at a global scale alongside unease in people's daily lives from a rise in international crude oil and grain prices and impediments in the stable supply of some kinds of marine products, raw materials, and so on.

Last month, I listened to the voices of people employed in food-related industries in Toyosu; this month, I talked to people at small- and medium-sized manufacturing enterprises in Tsubamesanjo, Niigata Prefecture, where I visited, and to farming families and homemakers I met in Ishikawa Prefecture. Even though they were struggling in the wake of the rise in crude oil and food prices, the people I spoke to were giving it their all to somehow make it through this situation.

No matter what, we must not allow soaring crude oil and commodity prices to hinder the recovery of our socioeconomic activities from the crushing COVID-19 situation. Thus far we compiled measures to combat spiking energy prices within our November 2021 economic measures and emergency measures to counter spiraling crude oil prices in March, and we immediately put these into implementation.

At the same time, as the situation in Ukraine, along with the accompanying spike in the prices of crude oil, raw materials, grains, and more, and instability in physical distribution, are unpredictable, it is imperative that we continue to press forward proactively with our responses, maintaining a mid- to long-term perspective.

Consistent with this thinking, I will manage our economic and fiscal policy in an exhaustive manner through a two-stage approach.

The first stage is the comprehensive emergency measures that were decided today, which have a total project scale of 13 trillion yen. In order to respond urgently and agilely to the impacts upon people's daily lives and economic activities caused by rocketing crude oil and commodity prices accompanying the Ukraine situation and ensure we restore our economic and social activities from the extremely trying COVID-19 situation, within April we will take a Cabinet decision on the use of general reserve and COVID-19 reserve funds and swiftly transition into implementation to deliver various forms of readily-accessible support measures to the public.

Beyond that, as the second stage, we will compile the vision and the action plan of a New Form of Capitalism and our Basic Policy on Economic and Fiscal Management and Reform 2022 by June. After the House of Councillors election this summer, we will give concrete shape to the comprehensive measures for advancing these initiatives and Japan will lead the way in making structural changes to our economy and society, including in the field of energy.

Moreover, there is no telling what conditions might exist until we reach this second stage, including the possibility of a resurgence of COVID-19 infections or of further increases in crude oil and commodity prices that would accompany the Ukraine situation becoming protracted.

It is also critical that we respond swiftly to the unforeseen fiscal demands that come alongside this kind of uncertain situation and ensure that the public has a sense of security. For this reason, as one part of the comprehensive emergency measures in this package, we will submit a supplementary budget to the current Diet session that will secure reserve funds of five trillion yen to address COVID-19 and sharply rising crude oil and commodity prices and curb dramatic changes in the price of fuel oil from June onward. We will have this budget enacted and make all possible preparations to ensure that we fully defend citizens' daily lives under any circumstances that may arise.

Now I would like to explain the package of comprehensive emergency measures that was decided upon today.

These measures contain four pillars.

The first pillar is responses to the rising price of crude oil. As for our measures to address fuel oil prices, until April we have held the price of regular gasoline down to roughly 172 yen per liter through compensation of up to 25 yen per liter. From now, on the basis of the conclusions drawn by an examination team having members from three political parties, we will strengthen the measures already in place to rein in drastic changes and establish a new subsidy system at a scale of approximately 1.5 trillion yen for use over five months.

Under this new system, we will lower the benchmark price to 168 yen in the near term while simultaneously raising the provision cap to a maximum of 35 yen, enabling us to respond to further sharp increases in fuel oil prices. By doing so, even if the price of gasoline were to exceed 200 yen per liter, we will curb the price at neighborhood gasoline stations to roughly 168 yen over the near term.

Furthermore, if by chance the international crude oil market price should shoot up to, for example, the never-before-seen level of USD150 per barrel and compensation beyond 35 yen per liter became necessary, we would provide assistance covering half of the price rise, thereby limiting domestic price increases.

In addition to gasoline, diesel oil, heavy oil, and kerosene, we will also have aviation fuel fall under the types of fuel covered by these measures. Additionally, we will provide support in the same way for liquefied petroleum gas for use in taxis. Besides this, we will press forward in providing support to industries significantly affected, including transport, agriculture, forestry, and fishery industries, and environmental health-related operations.

The second pillar is measures that will ensure the stable supply of energy, raw materials, food, and other goods. We will enhance our promotion of energy conservation and the use of clean energies, such as through assistance to make homes energy efficient, and transition to an energy structure that avoids reliance on imported resources to the greatest extent possible.

In anticipation of the current state of affairs continuing for some time, we will move forward in diversifying our procurement of semiconductor raw materials and industrial-use raw materials such as palladium, for which we have relied on Russia and Ukraine for much of our imports.

We will urge oil-producing nations to increase their crude oil output and diversify our energy procurement. In addition, if we are to stabilize the energy market and ensure an inexpensive, stable energy supply, it is critically important for us to introduce renewable energies to the greatest possible extent and advance the use of nuclear energy, with a view to diversifying our energy sources. We will make all-out efforts in this regard, working in cooperation with relevant countries.

Rising prices of food and other goods are a significant problem within household budgets.

The Government is purchasing imported wheat and selling it on to domestic milling companies. The international price of wheat has currently risen more than 10 percent because of the situation in Ukraine, but until September, we will leave the Government's selling price at the level it was before the rapid price increase. Alongside this, we will support converting from imported wheat to domestic rice or rice flour or to domestically grown wheat.

With regard to farms, in addition to supporting the stable procurement of raw materials for fertilizer, we will increase the safety net fund for mixed feed and use other such means to moderate the impact that rising import prices are having on farm management.

As for fisheries, we will provide support to enable the marine product processing industry to procure raw materials to serve in place of Russian-sourced marine products such as crab, sea urchin, and salmon roe. Furthermore, in light of uncertainty increasing in operations based on fisheries agreements concluded with Russia, we will flexibly provide assistance for affected fishing industry companies.

Moreover, since imports from Russia of wood are now partially prohibited, we will support the use of domestically-produced lumber.

The third pillar of our measures is assistance for small- and medium-sized enterprises (SMEs). We will continue to push forward with optimizing transactions so that increases in energy costs, raw material costs, labor costs, and the like can be transferred appropriately into prices. We will establish benefits in terms of public procurement and subsidies and promote wage increases.

We will do our utmost to enhance liquidity by further reducing the interest on safety net loans made by public sector financial institutions and by extending until September the term of unsecured loans that are interest free in real terms.

We will also establish special reserves for subsidies for business restructuring and support companies taking on the challenge of embarking on new undertakings even amidst the sharp rise in crude oil and commodity prices.

Our measures' fourth pillar is assistance for people in need who are facing rising commodity prices and other challenges in the midst of this highly trying COVID-19 situation. We will extend the application period for our measures to assist persons in need, including the Emergency Small-Amount Fund and other special-case lending. At the same time, we will provide a subsidy of 50,000 yen per child to low-income households raising children through "push-mode" assistance, thereby strengthening the safety net that protects people's daily lives.

We will, through the activities of non-profit organizations and others, provide well-tailored support for people suffering from loneliness and isolation as a result of the prolonged period that COVID-19 has affected us.

We will boldly expand our Extraordinary Regional Revitalization Grants and, within this program, newly establish funding of one trillion yen to address the sharp rise in crude oil and commodity prices. By doing so, in addition to the support measures being undertaken by the Government, we will make it possible for local public authorities to act in a well-tailored manner to lessen the burdens on the general public and business operators who are dealing with sharp upswings in the prices of electricity, natural gas, and other commodities through, for example, daily living assistance for people in need or assistance for agriculture, forestry, and fisheries business operators or SMEs, in accordance with the state of affairs in each local area.

We will also provide solid support for the decisions taken and efforts made by local authorities and boards of education towards lightening the burden of school lunch costs.

And finally, as we head into the Golden Week holiday period, I ask for your cooperation in combating COVID-19.

Thanks to the cooperation of the public, for the first time in three years, during Golden Week there will be neither priority measures to prevent the spread of disease nor a declaration of a state of emergency in effect. However, we must not let our guard down. I ask the public to cooperate with the following three points so that we are able to restore our socioeconomic activities gradually while avoiding a resurgence of infections.

The first is promoting vaccinations. I ask those who are busy day to day with work or school to take advantage of the string of holidays and get vaccinated. The third dose is effective in preventing infections and in particular makes it possible to avoid developing severe symptoms. I encourage you to take the vaccine to protect both yourself and the people close to you.

Second is the proactive use of testing. I urge people returning to their hometowns to either get a third dose of the vaccine or undergo testing before making their return. Besides the free testing available at nearby testing centers, during the Golden Week holiday period, we will expand the number of temporary testing centers that do this screening free of charge at major train stations, airports, and so on.

The third point is to be thorough in carrying out basic anti-infection measures. I once again ask everyone to be extremely diligent in taking measures such as wearing a mask, disinfecting one's hands, ventilating indoor spaces well, and avoiding the three Cs [of closed spaces, crowded spaces, and close-contact settings]. In this period of transitioning back to normal times, we will go on to gradually restore our socioeconomic activities even as we maintain the highest possible degree of vigilance.

I ask all of you for your understanding and cooperation.