Provisional translation

Press Conference by Shoichi Nakagawa, Minister of Finance and Minister for Financial Services

(Excerpt)

October 27, 2008

[Opening Remarks by Minister Nakagawa]

I have two matters that I would like to talk about.

Firstly, as you know, I reported to the Prime Minister yesterday on the state of the global economy and recent rapid movements in the stock markets, and he expressed strong concern about these matters. I have been summoned, together with policy planners from the ruling parties, to visit his official residence at 11:30 a.m. today.

Secondly, I will keep a close watch on the foreign exchange market, about which I am gravely concerned, as I regard the recent developments in the market - particularly the yen’s volatile fluctuations - as excessive swings and perceive that these disorderly movements may have adverse effects on the economy and the stability of the financial system.

I do not have any further statements to make.

[Questions and Answers]

Q.

Could you tell me what you can about the specific proposals, if any, that you are planning to present at the meeting starting at 11:30 today?

A.

As I told you, I talked with the Prime Minister for some time yesterday, and I explained my view of the current situation and conveyed my personal opinions. However, these are nothing more than my informal, personal opinions, and the Prime Minister will make his own decision and give instructions to us at the coming meeting. His instructions will probably be related mainly to the stabilization of the market and the maintenance and enhancement of financial functions. I do not have any clues as to what other instructions he will give us.

Q.

One of the specific measures said to be under consideration is the purchase of stocks held by banks. What are your views in this regard?

A.

As I have told you over and over again, I have been summoned by him, and so I expect him to give some instructions to us. I have no clues as to what instructions he will give.

Q.

Today, the market showed excessive fluctuations soon after opening. What are your views on this?

A.

At this time, I would like to refrain from commenting on what you say are excessive fluctuations.

Q.

Regarding the foreign exchange market, are you considering taking specific actions to stabilize the market if rapid exchange rate movements continue?

A.

As this is a very delicate matter, I regret to say that I should refrain from answering hypothetical questions.

Q.

You said that you have grave concerns over the foreign exchange market. If that is the case, could you tell me why you scheduled your press conference at this time, after the market opened at 9 a.m.?

A.

At what time do you think I should have held this press conference?

Q.

Didn’t you consider issuing a statement before the market’s opening? You declined to make comments on the market’s movements during trading hours, apparently because you are concerned that what you say could disrupt market activity. Is that correct?

A.

First, I might as well have started the press conference at 8:59 a.m. As for your argument that it is not appropriate to decline to comment on the market, I refrained from making comments on what you described as excessive fluctuations, because we cannot yet judge whether the current movements should be described as excessive fluctuations.

Q.

Just a while ago, the Nikkei average hit a new post-bubble low. Could you give us your frank feelings about this?

A.

Although prices should be determined by market forces, I am concerned about the very rapid stock price drop, which will likely have adverse effects on the Japanese economy and the sentiment of Japanese people and businesses.

(End)