Provisional translation

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

(Excerpt)

December 2, 2008

[Opening Remarks by Minister Nakagawa]

After today’s cabinet meeting, I attended a meeting of the strategic headquarters for space development. Later, Senior Vice Minister Takeshita attended a meeting of the headquarters for the reform of the national civil servant system on my behalf. I do not have any further statements to make.

[Questions and Answers]

Q.

Yesterday, the U.S. National Bureau of Economic Research announced that the United States has been in recession since December last year. Stock prices in New York dropped sharply yesterday, while the Nikkei Average slipped below 8,000 today. How do you view this situation?

A.

Following the Thanksgiving holidays last week in the United States, stocks plunged yesterday, and economic statistics showed poor results. Earlier today, I reported to Prime Minister Aso that the Nikkei Average dropped more than 400 points, as he has recently been very sensitive to stock price movements. I suppose that the synchronized stock price drops in the United States, Europe and Japan are due to the sharp deterioration of the U.S. economic condition. I believe that Japan must deal with this situation in an appropriate manner.

Q.

You have been devoting your energy to vigorous efforts toward facilitating fund-raising by small- and medium-size enterprises (SMEs). As a succession of listed companies have failed, some companies are apparently finding it difficult to obtain a “qualified opinion” from their audit firms despite their successful efforts to secure loans from banks. Are you planning to take any measures regarding auditing in addition to the financial measures that have already been announced?

A.

Audits have become strict following the enactment of the SOX (Sarbanes-Oxley) Act and the financial problems in the United States. However, speaking from the point of view of SMEs, which you asked about, I hope that financial institutions will take risks more actively with due consideration of regional economies.

Q.

There has been a media report that the Bank of Japan (BOJ) will decide to adopt a new measure to facilitate fund-raising at a Monetary Policy Meeting today. Although a decision has not yet been made, how would you view such a measure? Also, could you comment on a media report that the government is planning to request financial institutions to facilitate fund-raising?

A.

First, I intend to do my utmost amid this severe economic condition in my capacity as Minister of Finance and Minister for Financial Services. Regarding the BOJ, as I always say, although the central bank is independent from the government, I believe that it is beneficial for Japan if the BOJ and the government work together in conducting monetary and fiscal policy management. As you pointed out, I have heard that the BOJ will decide to adopt a plan regarding the provision of liquidity. If such a decision is made, I will welcome it. I would appreciate it if the BOJ would take further measures. For its part, the government must also do more.

(End)