Japanese Prime Minister Shinzo Abe emphasised on Monday that deregulation is the priority for the nation's growth strategy and aimed to push forward his economic policies.
Abe, speaking to reporters after the Tokyo International Conference on African Development (TICAD) held in the city of Yokohama near Tokyo, said he would watch market movements closely but refrained from commenting on them.
"I acknowledge deregulation is the priority for our growth strategy. As I decided to join talks of the TPP (Trans-Pacific Partnership), I would like to push forward what needs to be done without hesitation," Abe said.
Investors have not yet given up hope that Abe's aggressive fiscal and monetary expansionary policies, dubbed "Abenomics", will end deflation and two decades of economic stagnation. But a note of caution has crept in since Tokyo share prices began to slide on May 23 after months of heady gains.
Abe also said he expected the financial markets to calm down gradually as the Bank of Japan is communicating with the markets.
"Our economic policies are proving fruitful for certain. We should be more confident," Abe said.
The benchmark Nikkei tumbled to a six-week low on Monday, extending its slide from a 5-1/2-year high touched on May 23.
Many want to see concrete steps for deregulation and structural reform in Abe's "Third Arrow" growth strategy, due to be unveiled along with macroeconomic guidelines including fiscal reform on June 14.
But expectations for structural reform are already dimming, with few expecting early moves to reduce corporate taxes nationwide or to make it easier for firms to lay off workers in business sectors on the decline, at least ahead of a July election for parliament's upper house.
A third tranche of the growth strategy to be unveiled on Wednesday is expected to focus on the creation of special economic zones where deregulation and tax cuts can be implemented in limited geographic areas such as big cities.