Provisional translation

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

(Excerpt)

December 9, 2008

[Opening Remarks by Minister Nakagawa]

Today, we first discussed a report compiled by the ruling parties, with relevant ministers and the Chief Cabinet Secretary leading the discussion. I will elaborate on this later.

Next, as a preparation for the expected ministerial WTO meeting under the Doha Round, relevant ministers, including me, the Prime Minister, the Minister of Foreign Affairs, the Minister of Economy, Trade and Industry and the Minister of Agriculture, Forestry and Fisheries, as well as working-level staff discussed the current situation. As you know, in Geneva (where the WTO is based), Mr. Lamy (WTO Director-General) has decided to postpone the ministerial meeting by about a week, as there are three issues - the abolition of sector-by-sector tariffs under the NAMA (Non-Agricultural Market Access) negotiations, the scope of important items, and the special treatment of cotton - that need to be debated further in relation to two papers recently released. In any case, as agreed at the G-20 meeting in Washington, the Japanese government will try to reach an agreement on the modality within this year while consulting with the ruling parties and the general public, and at the same time, it is important to form a consensus on Japan's national interests that should be protected and pursued. That is what the Prime Minister instructed us to do. I appreciate the active negotiations being conducted day-in day-out by trade officials, including the representative of Japan, in Geneva and the issuance of those papers, although they contain a variety of problems.

At today's cabinet meeting, the Chief Cabinet Secretary revealed that the government will hold a ceremony to celebrate the 20th anniversary of the Emperor's ascension on November 12 next year. For my part, I mentioned the Ministry of Finance's plan to issue a memorial coin to coincide with the 20th anniversary ceremony.

At an informal meeting of cabinet ministers, employment-related issues were discussed, including government measures to support companies' employment efforts, assist people who have lost jobs and deal with the problem of cancellation of informal employment agreements between companies and new graduates, for which necessary budgetary measures, if any, will be taken either in the second supplementary budget or in the fiscal 2009 budget. Although I believe that these measures can bring about substantial benefits, the problem is that some people may lose jobs and homes suddenly at the end of the year, as some media reports have suggested. This must be avoided by all means. People losing jobs and left out in the cold. We must never let that happen in Japan. The Prime Minister instructed cabinet ministers to take strong measures to prevent such a situation. He instructed me to take appropriate measures if necessary in my capacity as Minister of Finance.

People in the situation I described would be, if I may say, like victims abruptly struck by a natural disaster, losing jobs and homes, struggling to eat and needing an emergency relief operation by a rescue organization like the Self-Defense Forces. If such a situation is actually occurring, we must take action. This would be a disaster, a social problem. Therefore, I hope that companies will do their best in this respect, although even world-class companies could face a management crisis suddenly. As instructed by the Prime Minister. I must take necessary measures to tackle problems expected to arise around the turn of the year, rather than wait till the compilation of the second supplementary budget.

Lastly, I would like to mention one more thing. “Economic Policy Package: Measures to Support People's Daily Lives” includes not only an enhancement of Japan Finance Corporation's safety net loans to small and medium-size companies, such as a revision of interest rates and other lending terms, but also the implementation of emergency operations by designated financial institutions based on credit provided by this corporation, which are intended to cope with the impact of natural disasters as well as the yen's upsurge and other extraordinary financial situations in Japan and abroad. Concluding that this should be implemented quickly in anticipation of a possible emergency, I decided yesterday to take necessary procedures. However, as this involves other ministries and agencies, I will obtain their support so as to enable an early implementation. Although I do not have any particular emergency in mind, I have decided to quickly implement this as part of efforts to take every possible measure to prevent any emergency from occurring around the turn of the year, although it may take several more days before a formal decision is made, as I said earlier.

I do not have any further statements to make.

[Questions and Answers]

Q.

The bill for revising the Act on Special Measures for Strengthening Financial Functions is now expected to be enacted on December 12. How do you feel about this?

A.

Although we have faced various difficulties, we would appreciate it if the bill is enacted. We will continue strenuous efforts toward the enactment in accordance with Diet procedures.

Q.

Regarding the same issue, if the bill is enacted on December 12, how long do you expect it will take before banks will actually receive funds.

A.

As the old saying goes, the last mile is the most difficult one. As for what will happen after the bill is enacted - I am not sure whether the bill will actually be enacted on December 12 - I would like to consider that after the enactment. We will make every possible effort toward the enactment.

(End)