Japanese Prime Minister Fumio Kishida said on Tuesday that steps taken under former premier Shinzo Abe's "Abenomics" policy of massive monetary and fiscal stimulus were not enough to create a sustainable and inclusive economy.

Under his "new capitalism" policy, Kishida aims to help create a virtuous cycle of economic growth and wealth distribution, he said during a speech at the World Economic Forum's virtual Davos Agenda conference.

Abenomics was deployed in 2013 to pull Japan out of economic stagnation, but it failed to close income gaps that widened as the ranks of workers in less-secure, low-paid jobs grew.

"Rather than leaving everything to market and competition, I will put emphasis on the government and private sector working together for socioeconomic transformation," said Kishida, who took office last October.

On climate change, Japan aims to cooperate closely with other countries in Asia so that they can jointly tackle the imminent global challenge.