Press Conference by the Minister for Financial Services

(Excerpt)

March 14 , 2003

Q.

Regarding the market stabilization measures that were announced by the government yesterday, there seem to be many ruling party members and market players who judge that the effects of the measures may be limited. How are you taking such judgment?

A.

I believe it all comes down to what they have in mind as quote-unquote 'effects.' Despite being under the circumstance in which stock prices are coming down increasingly worldwide due to the anxiety of the war, our intention was not to develop policies directed to change the stock price trend to counter such circumstances. The purpose rather rests with our conviction that measures should be taken to counter any drastic movement in the market by, for example, making the rules concerning market stabilization stricter. In that sense, I am confident that we have properly taken measures to the extent of availability at this point in time.

Q.

To confirm what you've just said, these are not intended to serve as policies or countermeasures to change the trend of stock prices. Is this understanding correct?

A.

Basically, a stock price trend is determined by supply and demand in the market. Backed by the unstable situation surrounding Iraq, this has become even more overwhelming. As it is not the case that the economy per se has been rapidly deteriorating, I find it necessary to respond calmly while keeping mindful of the fact that Japan is in the thick of the current global situation.

Q.

In the measures for securities markets announced yesterday, there is a mention that banks, institutional investors and pension funds will be requested to or are expected to take due consideration, which, to me, appears to be an interference with private entities' management autonomy. What is your opinion on that?

A.

This is not interfering with private entities' management autonomy but just requesting them to make an autonomous judgment in a thorough fashion, or to pay thorough attention not to misshape such judgment. Stock lending is a premier example in this regard. While stock lending does have the advantage of earning lending commissions on their part, the fact is that it may also entail disadvantages, and what we are requesting of them is to make this fact known thoroughly. As I really don't suppose that the market mechanism is something that could function automatically by leaving things as they are, it has to be maintained to function properly. My understanding is that the purpose of the request is to call their attention to such aspect so that we can all work on it properly.