Japanese Prime Minister Fumio Kishida pledged Tuesday to take all necessary measures to tackle the negative impact of recent price hikes by achieving wage growth in collaboration with the public and private sectors.

"We are now at a critical juncture in terms of whether we can guide Japan's economy into a cycle of growth, in which sustainable wage and investment increases will be repeated," Kishida said in a speech at Kyodo News headquarters in Tokyo.

Prime Minister Fumio Kishida delivers a speech at a gathering of newspaper editors in Tokyo on Nov. 28, 2023. (Kyodo)

As part of efforts to bolster Japan's economy, Kishida, the head of the ruling Liberal Democratic Party, emphasized the importance of promoting the "circular economy" to reduce carbon emissions by reusing products and resources.

"Japan has the potential to become an attractive global economic model in the field," said Kishida, whose government mapped out a new economic stimulus package of more than 17 trillion yen ($114 billion) earlier this month.

Kishida, meanwhile, said his administration will implement steps to support "bold domestic investment" in critical items such as semiconductors amid concerns that China has dominated crucial material markets.

A semiconductor shortage triggered by the novel coronavirus pandemic that began in early 2020 has laid bare the vulnerabilities of existing supply chains that depend heavily on China.

A supplementary budget for the fiscal year through March 2024 to fund the latest economic package is expected to be passed in parliament on Wednesday.

Japan's economy shrank an annualized real 2.1 percent in the July-September period for the first pullback in three quarters, while core consumer inflation accelerated to 2.9 percent in October from a year earlier.

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