Prime Minister Yukio Hatoyama vowed to revive the sluggish economy of Japan, the world's second biggest economy.
Hatoyama announced this during his first policy speech to parliament after leading his Democratic Party of Japan to power for the first time.
He told the lawmakers Monday that his biggest task was to put Japan's economy on a sustainable growth track, highlighting his strong desire to ensure the country's embryonic recovery takes root.
As a first step, the government will strive to create jobs in areas like nursing and farming, while cutting wasteful spending on public works projects.
He did not elaborate on government plans to reduce Japan's ballooning public debt.
The government will expand the welfare system, a key proposal of which includes payments to parents with children in an attempt to increase the birthrate and tackle Japan's aging and shrinking population.
DPJ dethroned the long-ruling Liberal Democratic Party from power in August by promising to increase spending on health and childcare without increasing taxes.
Despite disagreements over the relocation of an American military base, and Indian Ocean refueling mission for US-led naval forces scrapped, Hatoyama reaffirmed the importance of the alliance with the United States.
He reiterated that a "close and equal" alliance with the US is the cornerstone of Japan's diplomacy.
In his view, such a strategy is needed to ensure that conflict won't happen in bilateral ties. "What I mean by equal is a relationship in which Japan can actively make proposals about role of US-Japan relationship in ensuring a peaceful, safe world as well as about specific action guidelines, and (still) can cooperate" with Washington on those matters, he added.
During his visit to Japan last week, U.S. Defense Secretary Robert Gates had urged Tokyo to honor a 2006 agreement on reorganizing the US military presence in that country.
An agreement the two countries signed in 2006 requires the controversial US Marine base on the Okinawa island to relocate to a less heavily populated region on its west to alleviate disturbances to the local residents.
Japan's key security ally since the end of World War II, U.S. currently has about 47,000 troops in the country, most of them on the military base in Okinawa.
Gates' visit was intended to lay the groundwork for President Barack Obama's two-day tour of the country, beginning November 12.
In a speech critical of market fundamentalism, Hatoyama called for controlling market forces to create a more liveable society.
The democrat leader, who has been highlighting since the election campaign the need for Japan's recovery from its worst recession since World War II, said world's recent financial and economic crisis "has had a significant impact on Japan's economy and employment. He reminded that the current situation "still requires us to remain alert." The Cabinet's most important task is to "put Japan's economy back on a self-sustaining recovery track driven by private sector demand and secure sustainable growth while paying attention to international policy coordination."
He did not offer any target growth rates.
He pledged to implement gasoline tax cuts.
Japan will keep up the commitment of reducing its greenhouse gas emissions by 25% by 2020 from 1990 levels.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.