Japan's ruling camp to pledge cash handouts in election campaigns, local media say
TOKYO, June 10 (Reuters) - Japan's ruling coalition agreed on Tuesday to include a plan to distribute cash handouts in their election campaign pledges to help households cope with persistent inflation, media reported on Tuesday.
The handout plan could add to concerns over the government's already tattered finances, as lawmakers scramble to appease voters ahead of an upper house election set for July.
Prime Minister Shigeru Ishiba's Liberal Democratic Party (LDP) and its junior ruling coalition partner Komeito will discuss details of the plan, including the amount and whether to have an income threshold for recipients, according to local media.
"If tax revenue rises (above projections), it has to be returned to all the people," a senior LDP lawmaker told reporters on Tuesday.
The government shelved the idea of cash handouts in April as questions arose over the effectiveness of the handouts. But the plan has come back as the LDP resists growing calls from some opposition parties for tax cuts, which could weigh on the state finances more heavily.
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The Guardian
an hour ago
- The Guardian
Bolsonaro denies coup plot but admits discussing ‘alternative ways' to remain president
Brazil's former president Jair Bolsonaro has denied masterminding a far-right coup plot at his trial in the supreme court, but he admitted to taking part in meetings to discuss 'alternative ways' of staying in power after his defeat in the 2022 election. In just over two hours of questioning, the 70-year-old said that after the electoral court confirmed Luiz Inácio Lula da Silva's election victory, 'we studied other alternatives within the constitution.' Those options included the deployment of military forces and suspension of some civil liberties, Bolsonaro said, but he argued that such discussions could not be considered an attempted coup. 'A coup is something abominable. A coup may even be easy to start. The day after is simply unpredictable and harmful to everyone. Brazil could not go through something like that, and such a hypothesis was never even considered during my government,' he said. Bolsonaro confirmed his allies had considered various options, including the declaration of a state of siege, but did not pursue them because 'there was no climate for it, no opportunity; we didn't even have a minimally solid base to do anything.' The former chiefs of the air force and the army had previously told police that they opposed Bolsonaro's plans during those meetings, although they said the former navy commander pledged to back the rightwing autocrat. With a hoarse voice, the far-right leader used the live broadcast of his questioning to turn much of the hearing into a political platform, defending his 2019-2023 administration and repeatedly criticising Lula's third term. There had been some expectation over his face-off with the case's lead judge, justice Alexandre de Moraes – the former head of the electoral court, whom Bolsonaro has previously called a 'jerk' and a 'scoundrel'. But Bolsonaro apologised to Moraes and two other justices for saying in a meeting – a recording of which was submitted as evidence – that they had allegedly received between $30m and $50m each to rig the election. 'It was a vent, rhetoric I used,' he said. 'So, I apologise. I had no intention of accusing you of any misconduct'. Though he is barred from running for office by an electoral court ruling in a separate case – for spreading lies and attacking the voting system – Bolsonaro joked with Moraes, saying: 'I'd like to invite you to be my running mate in 2026.' Smiling, the justice replied: 'I'll pass.' Bolsonaro was the sixth defendant to be questioned since the trial began on Monday of the eight men considered the 'nucleus' of the attempted coup. The accused include four former Bolsonaro ministers – three of them army generals; the ex-commander of the navy; and the ex-president's former right-hand man, Lt Col Mauro Cid. It is the first time that high-ranking military officers have ever faced trial over an attempted coup d'état in Brazil, a country that endured a bloody dictatorship from 1964 to 1985. Journalist and political analyst Miriam Leitão wrote in her column in O Globo that 'what was most striking … was the casual atmosphere in which a coup d'état was discussed within the Bolsonaro government. 'Everyone knew about it – there were several conversations, meetings in function rooms, inside the presidential palace and at the top of the military hierarchy,' she wrote. The first to testify was Bolsonaro's former aide-de-camp, Lt Col Mauro Cid, who signed a plea bargain and whose testimony, alongside evidence gathered by the federal police, forms the basis for the prosecution's case. He reaffirmed that Bolsonaro edited a draft decree that provided for the arrest of several authorities, including members of Congress and supreme court justices, and the creation of a commission to organise new elections. 'He [Bolsonaro] shortened the document, removing the authorities' arrests. Only you would be imprisoned,' Lt Col Cid told Moraes. He also said that his former boss attempted unsuccessfully to find some kind of 'fraud' in the electronic voting system, hoping to 'convince the armed forces to do something'. Once the defendants' testimony concludes, the prosecution and defence will have five days to request further inquiries to gather new evidence, which the rapporteur, Moraes, may accept or reject. After that come the final arguments and, ultimately, the trial verdict, which is expected in the second half of the year.
Reuters
2 hours ago
- Reuters
Bolsonaro denies orchestrating Brazil coup in Supreme Court testimony
BRASILIA, June 10 (Reuters) - Former Brazilian President Jair Bolsonaro denied that he led an attempt to overthrow the government after losing the 2022 election during his trial before the country's Supreme Court on Tuesday, but acknowledged taking part in meetings aimed at reversing the outcome. Bolsonaro said he and senior aides discussed alternatives to accepting the electoral results, including the possibility of deploying military forces and suspending some civil liberties, but he said those proposals were soon dropped. "The feeling was that there was nothing else we could do. We had to swallow the election results," the ex-president said. "I never acted against the Constitution," Bolsonaro added, holding a copy of the country's 1988 charter that re-established democracy after two decades of military rule. In March, the Supreme Court agreed to hear the case against Bolsonaro and seven other people, including several military officers, who were charged with plotting a coup to stop Luiz Inacio Lula da Silva from taking office in January 2023. The charges stem from a two-year police investigation into the election-denying movement that culminated in riots by Bolsonaro supporters in the capital in early 2023, a week after Lula took office. Bolsonaro, who was the sixth defendant to testify in the case, spent several minutes of his two hours of testimony defending his administration's achievements and his criticism of the country's electoral system. Dozens of witnesses were previously heard by the court, an indication that the case is moving swiftly and could be concluded by the end of the year, avoiding overlap with campaigning for the 2026 presidential election. Bolsonaro has insisted he will run in that campaign, despite an electoral court decision barring him from seeking public office until 2030. On Monday, Bolsonaro attended the trial to watch testimony from Mauro Cid, his former aide turned whistleblower, and then shook his hand. Cid told the court that the former president reviewed a draft decree that was central to the coup plot and made changes, while keeping a section that ordered the arrest of Supreme Court Justice Alexandre de Moraes, who is now overseeing the case against Bolsonaro and his allies. On Tuesday, the former president said he only briefly saw the draft decree and never edited it. He also apologized for making unfounded corruption allegations about Supreme Court justices. "Forgive me," he told Moraes. A final ruling on Bolsonaro's case is expected by October.
Reuters
2 hours ago
- Reuters
TRADING DAY Buoyancy trumping uncertainty
ORLANDO, Florida, June 10 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. Global markets remain buoyant, awaiting the outcome of U.S.-China trade talks in London and U.S. inflation figures on Wednesday, both of which could have a bearing on guidance from the Federal Reserve next week and investor sentiment more broadly. In my column today I look at how the Trump administration's crackdown on immigration could cause labor market distortions and headaches for Fed officials. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Buoyancy trumping uncertainty On the day The World Bank slashed global growth forecasts, warning of the "significant headwind" from tariffs and heightened uncertainty, global stocks clocked their fifth consecutive all-time high. Britain's benchmark FTSE 100 is a whisker from reaching new peaks and Germany's DAX hit an all-time high last week, while on Wall Street the Nasdaq and S&P 500 are within a couple of percentage points of new record levels also. Yet the reasons for equity investors to be fearful right now are plentiful - worries over growth, inflation, tariffs, long-term interest rates, U.S. debt and deficits, and the fact that China, the world's second-largest economy, is still mired in a low growth and deflationary funk. Something not quite adding up, right? Perhaps. On the other hand, the fiscal taps are being turned on in China and Germany, British finance minister Rachel Reeves outlines her multi-year 2 trillion pounds ($2.7 trillion) spending plan on Wednesday, and U.S. President Donald Trump's 'big beautiful bill' currently going through Congress is front-loaded with fiscal stimulus too. None of that is really fresh news but the upshot is a lot of liquidity coursing through the global economy. Right now it is something investors appear willing to accept even if the price is increased debt, and for the U.S. and UK in particular, worse public finances. Big corporate deals are being struck, like the OpenAI and Google cloud service tie-up and Meta Platforms reportedly paying $15 billion for a 49% stake in AI startup Scale AI, and implied equity and bond volatility is low. After a period of fretting more about deficits and spiking bond yields, investors may now be viewing the future with their glass half full. Fiscal stimulus is coming and interest rates around the world are being cut. The monetary outliers are Japan and the U.S., but the Bank of Japan could be near the end of its tightening cycle and the Fed may be about to begin easing later this year. On top of this, there's a general belief that Trump will back down from his hardline stance on tariffs and that a palatable deal with China will be reached, the so-called 'TACO' - Trump Always Chickens Out - trade. Fresh news on that front, at least, should be forthcoming on Wednesday. Trump immigration crackdown creates jobs distortions, Fed headaches Seismic shifts in immigration are distorting the U.S. employment picture, making it harder for investors and policymakers to know exactly how much the labor market is actually slowing. Assuming the Trump administration makes good on its pledge to reduce immigration, either by stopping the flow of people coming into the country or by deporting many already here, the labor supply will shrink. The long-term impact of lower immigration is generally agreed to be negative, as new workers are needed to replace retirees, fill job vacancies and drive economic growth. Over time, fewer new workers will likely mean lower growth. But in the short term, a smaller pool of workers results in a tighter labor market, which keeps a lid on the unemployment rate, albeit artificially and probably temporarily. This may already be playing out. Figures released last week showed that employment in May fell by 696,000 jobs. That's the biggest single monthly decline since the historic losses seen during the pandemic in early 2020. Some economists argue that the recent drop is a consequence of Trump's immigration crackdown. Nonfarm payrolls rose 139,000. Meanwhile, the unemployment rate held steady at 4.2%, which though higher than it was two years ago, is still historically low by any measure. All else being equal, this points to a tight labor market, which should put upward pressure on wages and perhaps even warrant a more hawkish policy stance from the Federal Reserve. But that is almost certainly a misreading. When labor supply and the labor force participation rate fall, this brings down a country's so-called 'breakeven' job growth. That's the number of net new jobs the economy needs to keep up with growth in the working-age population and maintain a steady unemployment rate. That figure is falling, and if the Trump administration toughens up its anti-immigration policies further, this decline is likely to accelerate. According to economists at Morgan Stanley, breakeven employment growth averaged 210,000 jobs a month last year, and is averaging 170,000 so far this year. They reckon it will fall to 90,000 by the end of this year and 80,000 next year. Ryan Sweet, chief U.S. economist at Oxford Economics, goes further, estimating that the breakeven rate is "quickly approaching" 50,000 jobs a month due to weakening labor supply growth, primarily because of reduced immigration. "The unemployment rate can remain low, but for the wrong reasons," Sweet says. If these projections prove accurate, monthly employment and job growth could continue to slow without raising the unemployment rate. The contradictory signals this sends could create confusion for both investors and policymakers. In his press conference after the most recent Fed policy meeting, Chair Jerome Powell repeatedly told reporters that the labor market is "solid". The unemployment rate "remains low," and the labor market is "at or near maximum employment." If these headline indicators are the gauge, Powell is absolutely correct. But he also stressed that policymakers are looking at the "whole huge array" of labor market indicators for a truer guide. One of those inputs in the months ahead will no doubt be net immigration. And that could generate significant uncertainty, as there are huge gray areas and wide margins of error when trying to estimate net immigration and its impact on the labor market. In January, the non-partisan Congressional Budget Office projected net immigration of 2 million people this year and 1.5 million next year, down from an estimated 3.3 million in 2023. With Trump seemingly hardening his stance on immigration, those projections could turn out to be far too high. Morgan Stanley's economists just slashed their immigration forecasts to 800,000 this year and 500,000 next year. If these figures turn out to be closer to reality, we could soon be looking at a "tight" labor market with monthly payrolls gains of well under 100,000. Pity the poor Fed Chair who has to communicate policy in that environment. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
