Since I introduced a package of measures to revive Japan’s economy, there are three questions I am regularly asked about our country’s prospects. First, people want to know whether I am genuinely committed to the “third arrow” of Abenomics. Make no mistake: I am. Our structural reforms have shifted up a gear this month. We reduced Japan’s corporate taxes by 2.4 per cent this year, and will cut the rate further next fiscal year. We aim to reduce the level of the effective tax rate to the 20s over several years. This will help growth and draw international investors. Strengthening corporate governance is also critical to enhance shareholder value.
This month we established a rule requiring companies to appoint outside directors or explain why they have not done so. By 2015 the Tokyo Stock Exchange will introduce a wide-ranging corporate governance code, also asking that companies “comply or explain”. Over 100 institutional investors have adopted a stewardship code, similar to one used in the UK. We are pushing ahead with forward-looking reforms to the Government Pension Investment Fund, which has assets of $1.2tn. A review of the fund’s portfolio will be completed as quickly as possible, benefiting the insured and also bringing investments that foster growth.