Japan's new finance and economy ministers pledged to take bold policy action to revive the pandemic-hit economy, indicating that the government led by Prime Minister Fumio Kishida will maintain fiscal and monetary support.

To put a definitive end to deflation, Finance Minister Shunichi Suzuki said he was told by Kishida to keep to strong monetary easing, flexible fiscal spending, and a growth plan. Suzuki said "I hope the BoJ strives to reach its pricing target while ensuring markets and business funding remain stable."

Kishida to name Shunichi Suzuki as Japan's new finance minister - Nikkei Asia

At a separate press conference, Daishiro Yamagiwa, the new economy minister, said the government would take all necessary measures to help the economy "flexibly and without hesitation."

Kishida has promised to put together a stimulus package worth tens of trillions of yen, which might assist the world's third-largest economy firm up its growth.

Suzuki said he couldn't say how big the stimulus package might be right now because it would depend on policymakers' and the ruling coalition's discussions. "The cost of dealing with the pandemic has worsened Japan's financial position," he added, emphasising the importance of creating a long-term path toward fiscal reform to ensure Japan maintains market trust over its finances.

On Monday, Japan's COVID-19 case numbers fell to their lowest level in in a year, with continuous vaccinations raising optimism of a resurgence in consumption from pent-up demand as the economy slowly reopens.

Smaller stores, on the other hand, continue to struggle with weak sales, and many part-time jobs were lost, impacting on an already fragile recovery that is being hindered by declining exports and output due to supply constraints.

According chief cabinet member Matsuno, the government was keeping a close eye on oil prices because rising fuel costs would hurt corporate profitability and put more pressure on households.