Japanese Prime Minister Shinzo Abe has pledged to boost incomes in the latest tranche of measures aimed at spurring growth in the world’s third-biggest economy.

The Prime Minister, who took office in December after his party’s big election win, said he would target annual gains of 3 per cent or more in gross national income per capita.

That would be an increase of 1.5 million yen ($15,000) over 10 years from around 3.84 million yen in 2012.

Abe said it now time for the people of Japan and companies in Japan to swing into action as the Japanese Government is aiming at reversing the downward spiral of per capita gross national income so as to give incomes a boost of 3 per cent or more annually.

Rising incomes are vital to the success of Abe’s ambitious goals to end years of entrenched deflation and decades of economic stagnation during which China sped past Japan in the world’s economic rankings.

The Bank of Japan’s sweeping monetary expansion, announced in April, aims to achieve 2 per cent inflation in less than 2 years. Analysts say wages will need to rise faster to put consumer prices and growth on a sustainable upward track.

The growth strategy is the “Third Arrow” in his “Abenomics” prescription to spur sustainable growth. The first two “arrows” are hyper-easy monetary policy and big government spending.

The Prime Minister said action, innovation, openness and daringness are the keywords to turn around two decades of stagnation into ten years of recovery and the Japanese economy will witness the much desired turnaround and Japan with be moved out of stagnation.

Financial market investors have not given up hope that Abe’s policies will end the country’s prolonged 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.

The stock price falls are also a worry to Abe’s government ahead of a July 21 upper house election that his party needs to win to cement his grip on power.

The benchmark Nikkei stock average soared 53 per cent from the end of 2012 to a 5-1/2-year peak, but after the Prime Minister speech, it has lost around 15 per cent since then and has continued  to slide.