REFILE-HIGHLIGHTS-Japan opposition eyes BOJ law revision, 2 pct inflation

Fri Nov 16, 2012 3:25am EST

TOKYO Nov 16 (Reuters) - Japan's main opposition Liberal Democratic Party (LDP) has vowed to do its utmost to beat deflation and the strong yen, seeking a 2 percent inflation target and calling for a revision of the law to boost cooperation between the government and central bank.

Japan is set for a Dec. 16 election that is likely to return the long-dominant LDP to power with a conservative former prime minister at the helm.

Following are some key points from the LDP's draft economic plan, which become the basis of its campaign platform for the election:

- Aiming for nominal economic growth of 3 percent or more by adopting all available policy steps through new growth strategy, monetary easing, regulatory reform and creation of effective demand.

- To tackle the task of beating deflation and a strong yen as a top priority.

- To set a clear-cut inflation target of 2 percent and to create a framework for strengthening cooperation between government and the Bank of Japan (BOJ), the central bank, through revision of the BOJ law.

- Launching a public-private fund involving the government, the BOJ and private sector firms, and consider taking various steps including purchases of foreign bonds by the fund.

- To take flexible policy steps to cope with risks and the negative impact of Europe's debt crisis, the slowdown in emerging markets, and slack domestic demand as a result of the sales tax increase.

- To manage fiscal policy more flexibly to deal with the economic slump and future risks over the next two to three years. To swiftly compile an extra budget in order to ensure seamless steps towards the next fiscal year's budget.

- Forming a plan to stop Japanese firms moving overseas by overcoming restrictions on electricity and energy, and cutting the corporate tax to a range of 20 to 30 percent.

- To launch an "international economic strategy council" with the aim of taking advantage of growth in Asia. To enhance cooperation with Asian economies on currencies and finance. To promote strategic overseas investment, energy resources and economic cooperation pacts.

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