Japan's top financial regulator backed the argument that the Bank of Japan should buy stocks, land and exchange-traded funds (ETFs) if stock prices keep plunging.
"I am for it in the sense that [the central bank should] take drastic measures," Financial Services and Economy Minister Heizo Takenaka said on a Japanese talk show yesterday.
Takenaka was referring to the remark by Hiroshi Okuda, head of the Japan Business Federation or Nippon Keidanren, on Friday after the key Nikkei-225 average fell to its lowest level in two decades.
Finance authorities and the Bank of Japan would need "a considerable resolution" if the Nikkei index falls far below the 8,000 mark, the Japanese media quoted Okuda as saying in Berlin.
Okuda, also chairman of Toyota Motor Corp, was in Germany on the business lobby's European mission.
Though he agreed with Okuda, Takenaka stressed he would not tell the central bank what items it should buy to guarantee its independence from the government.
In Tokyo on Friday, the Nikkei-225 index sank 225.03 points, or 2.68 percent, to 8,144.12, as fears of a war in Iraq mounted hours before a crucial UN Security Council meeting.
The close was the lowest by the benchmark Tokyo Stock Exchange since March 15, 1983, when it hit 8,111.83.
Asked if the government will act to prop up stock prices ahead of the end-March closing of account books, Takenaka said: "In principle, it is impossible to take measures to boost stock prices."
But he said that Japan's stock market was also suffering from "various distortions."
"We will correct crooked parts in its structure," he said without elaborating.
In February 2002, the government's Financial Services Agency introduced tighter regulations on short-selling after punishing a string of foreign investment banks for breaking the securities law. Share prices have risen sharply since the new rules were introduced.
Speaking on another private network Fuji, the ruling Liberal Democratic Party's Secretary General Taku Yamasaki also supported Okuda's idea, and suggested there may be a supplementary budget to the ¥81.8 trillion (US$693 billion) spending package for the new financial year from April.
"There may be room for considering [extra spending] as a future issue," he said, just five days after the initial budget bill cleared the lower chamber of parliament.
The budget includes record planned bond issues and the first rise in initial spending estimates for three years.
But some politicians believe the government must spend more to support the economy as banks accelerate bad loan write-offs, which could result in further company bankruptcies and job losses.
Meanwhile, an economic daily reported Sunday that the Japanese government and Bank of Japan have spent about ¥2 trillion (US$17 billion) since January to curb the Japanese currency's strength and help exports.
Yen selling rose as authorities fear that a strong yen may damage exports such as cars and electronics, which could be the driving force of Japan's economic recovery, the Nihon Keizai Shimbun said.
On Friday when the dollar slid below ¥117 abroad, hitting the lowest point since last August, the Japanese authorities spent several hundreds of billions of yen (several billion dollars) to purchase the greenback, it said.
Authorities spent ¥1.2 trillion in January and February, the paper said, adding interventions later had brought the sum to about ¥2 trillion.
The amount is considered large as market interventions cost authorities some ¥3.2 trillion in the whole of 2001 and ¥4 trillion last year, it said.
The authorities want to prevent the yen's rise, particularly because the stock market is now at a 20-year low, it said.
MILESTONE: The foreign minister called the signing ‘a major step forward in US-Taiwan relations,’ while the Presidential Office said it was a symbol of the nations’ shared values US President Donald Trump on Tuesday signed into law the Taiwan Assurance Implementation Act, which requires the US Department of State to regularly review and update guidelines governing official US interactions with Taiwan. The new law is an amendment to the Taiwan Assurance Act of 2020 focused on reviewing guidelines on US interactions with Taiwan. Previously, the state department was required to conduct a one-time review of its guidance governing relations with Taiwan, but under the new bill, the agency must conduct a review “not less than every five years.” It must then submit an updated report based on its findings “not later
The Presidential Office today thanked the US for enacting the Taiwan Assurance Implementation Act, which requires the US Department of State to regularly review and update guidelines governing official US interactions with Taiwan. The new law, signed by US President Donald Trump yesterday, is an amendment to the Taiwan Assurance Act of 2020 focused on reviewing guidelines on US interactions with Taiwan. Previously, the department was required to conduct a one-time review of its guidance governing relations with Taiwan, but under the new bill, the agency must conduct such a review "not less than every five years." It must then submit an updated
CROSS-STRAIT COLLABORATION: The new KMT chairwoman expressed interest in meeting the Chinese president from the start, but she’ll have to pay to get in Beijing allegedly agreed to let Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) meet with Chinese President Xi Jinping (習近平) around the Lunar New Year holiday next year on three conditions, including that the KMT block Taiwan’s arms purchases, a source said yesterday. Cheng has expressed interest in meeting Xi since she won the KMT’s chairmanship election in October. A source, speaking on condition of anonymity, said a consensus on a meeting was allegedly reached after two KMT vice chairmen visited China’s Taiwan Affairs Office Director Song Tao (宋濤) in China last month. Beijing allegedly gave the KMT three conditions it had to
STAYING ALERT: China this week deployed its largest maritime show of force to date in the region, prompting concern in Taipei and Tokyo, which Beijing has brushed off Deterring conflict over Taiwan is a priority, the White House said in its National Security Strategy published yesterday, which also called on Japan and South Korea to increase their defense spending to help protect the first island chain. Taiwan is strategically positioned between Northeast and Southeast Asia, and provides direct access to the second island chain, with one-third of global shipping passing through the South China Sea, the report said. Given the implications for the US economy, along with Taiwan’s dominance in semiconductors, “deterring a conflict over Taiwan, ideally by preserving military overmatch, is a priority,” it said. However, the strategy also reiterated
RSS