Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

June 19, 2007

[Minister's Statement]

I would like to report on the Cabinet meeting. The Minister for Gender Equality and Social Affairs reported on the FY 2006 gender-equal society formation and the FY 2007 gender-equal society formation measures. The Minister of Justice reported on human rights education and enlightenment measures in FY 2006. The Minister for Foreign Affairs reported on FY 2006 government measures against abduction and other human rights abuses by North Korean authorities. At a ministerial conference, the Minister of Finance made remarks on a report on effective utilization of state assets. The Minister of Land, Infrastructure and Transport made similar remarks on the report on effective utilization of state assets. The Minister of Land, Infrastructure and Transport made remarks on a survey report on bid-rigging practices pertaining to floodgate construction. The Minister of Internal Affairs and Communications made remarks on the third party committee for the confirmation of pension records. The Minister of Health, Labour and Welfare also reported on the third party committee for the confirmation of pension records. The Prime Minister also made a similar report. The Minister of Health, Labour and Welfare reported on tunnel pneumoconiosis prevention measures. The Prime Minister also issued a report on this matter.

Prior to the Cabinet meeting, a decision was reached in regards to an urban revitalization project. At a meeting attended by the Prime Minister, the Urban Revitalization Headquarters reached a decision on the promotion of urban revitalization for the enhancement of international financial base functions as an urban revitalization project. The enhancement of the international competitiveness of Japanese financial and capital markets is a key challenge in Japan's quest to sustain economic growth amid the falling birthrate and aging population. The enhancement of urban functions geared towards international finance centers should be combined with institutional measures aimed at reforming financial and capital markets and promoting human resources development and special services so as to pave the way for a race for improvement in convenience for market participants on the part of Japanese and foreign market players. We hope that relevant private sector parties will subjectively and positively promote this urban revitalization project. The Financial Services Agency is willing to closely cooperate with the Urban Revitalization Headquarters in this respect. That concludes my remarks.

[Questions and Answers]

Q.

Please allow me to ask some questions about the Daiwa Toshi Kanzai case. What is your view in regards to the government's response to the case?

A.

Regarding the case, I am aware that the government has consulted with the relevant authorities and plans to file an appeal against an earlier ruling this afternoon. As for the reasons for the appeal, I would like to note this has been the first ever ruling to the effect that the government's failure to exercise regulatory authorities was responsible for causing losses on financial product transactions. In consideration of the graveness of the legal issue in question, we believe that we should seek a higher court decision on the matter. This case covers the standards for calculations of provisions, inspection and regulation of registered service providers and many other important issues for future financial industry regulations. In this sense, we have concluded that we should seek a higher court decision. I would like to refrain from making comments on specific points since the case is still pending.

Q.

Regarding the Daiwa Toshi Kanzai case, the relevant money losers reportedly believe that the government should not file any appeal. What are your views on this point?

A.

It's impossible to imagine the hardship or pain for the part of those who have lost money through these events. We have profound sympathy for them. At the same time, we are angry at Daiwa Toshi Kanzai that has plunged these people into the hardship. We also believe that the government is obliged to take firm measures to prevent this kind of crime. Considering these points, we would like to address the Daiwa Toshi Kanzai case.

(End)