Bank of Japan governor Toshihiko Fukui pledged to work with the government to rebuild a financial system that he said was in a "severe state" because of bad loans and plunging stock prices.
"We would like to work with the government, and as the central bank we will implement steps to stabilize the country's financial system," Fukui said in a speech to the bank's branch managers.
He said the bank would spell out details of a plan to buy corporate debt ``as soon as possible.''
The central bank this month said it might buy asset-backed securities to give companies an alternative source of financing to bank lending, which has fallen for six years as banks struggle to write off bad loans estimated at ¥52.4 trillion (US$438 billion).
Fukui, who was inaugurated on March 20, is looking for new ways to pull Japan out of a 12-year slump. His predecessor, Masaru Hayami, cut interest rates almost to zero in March 2001 and tripled purchases of bonds from banks to Y1.2 trillion a month.
Such steps haven't reversed a five-year drop in consumer prices that has sapped corporate profits and inflated the value of debt. Nor have they kept share prices from plunging. The Nikkei 225 Stock Average fell 28 percent in the fiscal year to March 31, inflicting losses on banks such as Mizuho Financial Group Inc.
Politicians are pressing Fukui to do more. Last week, the ruling Liberal Democratic Party's economic panel urged the bank to prop up share prices by financing a private agency that would buy stock. It also asked the bank to buy real-estate investment trusts and exchange-traded funds.
The state of the world's second-largest largest economy is "flat in general," Fukui said. The bank sees "strong uncertainty" about the overseas economy and the effects of the Iraq war.
Financial markets have been stable even after the March 31 fiscal year-end, when banks had to account for losses on investments, because the central bank has taken steps to provide liquidity, he said.
Heads of the central bank's 32 branches nationwide and offices in London, New York and Hong Kong are meeting in Tokyo to report on their regional economies.
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
CHIP WAR: The new restrictions are expected to cut off China’s access to Taiwan’s technologies, materials and equipment essential to building AI semiconductors Taiwan has blacklisted Huawei Technologies Co (華為) and Semiconductor Manufacturing International Corp (SMIC, 中芯), dealing another major blow to the two companies spearheading China’s efforts to develop cutting-edge artificial intelligence (AI) chip technologies. The Ministry of Economic Affairs’ International Trade Administration has included Huawei, SMIC and several of their subsidiaries in an update of its so-called strategic high-tech commodities entity list, the latest version on its Web site showed on Saturday. It did not publicly announce the change. Other entities on the list include organizations such as the Taliban and al-Qaeda, as well as companies in China, Iran and elsewhere. Local companies need
CRITICISM: It is generally accepted that the Straits Forum is a CCP ‘united front’ platform, and anyone attending should maintain Taiwan’s dignity, the council said The Mainland Affairs Council (MAC) yesterday said it deeply regrets that former president Ma Ying-jeou (馬英九) echoed the Chinese Communist Party’s (CCP) “one China” principle and “united front” tactics by telling the Straits Forum that Taiwanese yearn for both sides of the Taiwan Strait to move toward “peace” and “integration.” The 17th annual Straits Forum yesterday opened in Xiamen, China, and while the Chinese Nationalist Party’s (KMT) local government heads were absent for the first time in 17 years, Ma attended the forum as “former KMT chairperson” and met with Chinese People’s Political Consultative Conference Chairman Wang Huning (王滬寧). Wang
OBJECTS AT SEA: Satellites with synthetic-aperture radar could aid in the detection of small Chinese boats attempting to illegally enter Taiwan, the space agency head said Taiwan aims to send the nation’s first low Earth orbit (LEO) satellite into space in 2027, while the first Formosat-8 and Formosat-9 spacecraft are to be launched in October and 2028 respectively, the National Science and Technology Council said yesterday. The council laid out its space development plan in a report reviewed by members of the legislature’s Education and Culture Committee. Six LEO satellites would be produced in the initial phase, with the first one, the B5G-1A, scheduled to be launched in 2027, the council said in the report. Regarding the second satellite, the B5G-1B, the government plans to work with private contractors
RSS