Japan has taken sufficient steps to escape a financial crisis this month, a top minister said yesterday, although another official warned banks remain hobbled by massive bad loans.
Some analysts had forecast a banking crisis before the fiscal year end on March 31 as bad loans mounted, banks' holdings of shares plunged in value and depositors fled weaker lenders ahead of the partial lifting of a government guarantee on deposits.
"We have already taken enough measures to prevent a so-called March crisis, including concerns over the payoff [deposit guarantee] scheme," Chief Cabinet Secretary Yasuo Fukuda told a regular news conference.
The government will replace a blanket guarantee on most bank deposits with a cap of ?10 million (US$78,000) on time deposits from April.
It has also tried to shore up public confidence in the banking system by announcing the creation of a special bank in late March to take over operations at collapsed lenders.
But surviving March without a crisis was "a minor issue," warned Financial Services Minister Hakuo Yanagisawa.
"I think it is more important to do what needs to be done, like the disposal of non-performing loans and reduction of banks' shareholdings," he said.
"What is important is to regain [investors' and consumers'] confidence in the Japanese financial system. We must do whatever needs to be done to achieve that goal," he told a separate press briefing.
"Compared to that goal, the question of whether or not [banks] can survive until the end of the fiscal year in March is a minor issue."
Tokyo has promised to add ?2 trillion this fiscal year and another ?2 trillion by March 2003 into a stock-buying body to acquire some of banks' massive share portfolios and reduce their exposure to stock price swings.
It will also beef up operations at the state-run Resolution and Collection Corp -- a bad-loan buying body -- to accelerate write-offs of non-performing loans.
The moves, along with tighter restrictions on short-selling, have helped fuel a recent stock market rally, which has seen the headline Nikkei-225 index rise around 20 percent in the past month.
But the bad loan problem remains undiminished, said Hirokazu Yuihama, senior strategist at the Daiwa Institute of Research.
"Given that, the market will likely stay in a correctional phase after April," he said.
Japanese banks hold ?36.8 trillion in loans according to Tokyo's conservative estimate, while some private analysts say the real total is over five times higher.
The government is pressuring banks to write off bad loans, cited as a root cause of Japan's economic slump, but observers say it must also inject public money into banks as more loans turn sour.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source