Press Conference by Kaoru Yosano, Minister of State for Economic and Fiscal Policy and Financial Services

December 13, 2005

Minister's Statement

The Cabinet met and discussed all proposals as planned. As for proposals relating to the FSA, the FRC report was approved at the Cabinet meeting and will be submitted to the Diet.

Q & A

Q.

In connection with the incident of an erroneous order for shares by Mizuho Securities, facts began to emerge slowly about the dealing departments of other securities corporations having bought substantial numbers of these shares, following the placement of the erroneous order. Would you please share your thoughts on this?

A.

I realize that transactions were consummated on the exchange floor in a legal sense. However, dealing departments' buying up shares to profit, instead of providing broker services to process customer's orders, while being fully aware that the order had been placed by mistake does not paint a nice picture. I think that even securities companies' management should abide by the aesthetics of conduct. A while ago, a book was published that contained numerous heart-warming anecdotes. This latest conduct is not something that can make its way into the book.

Q.

About departure from deflation, may I ask for your view on the prospect of Japan pulling out of deflation during the 2006 fiscal year?

A.

We are currently in the process of putting together the fiscal 2006 budget and the economic forecast for Japan in the 2006 fiscal year, which will be the basis of the budget. We are also working closely with various government offices. I am afraid that we are not yet able to disclose these figures that we are currently working on. To give you an indication of the trend, however, we expect the deflator of the CPI in the 2006 fiscal year to exceed zero.

Q.

The trading of J-Com shares on the Tokyo Stock Exchange is scheduled to resume tomorrow. What level of threshold price would you consider to be appropriate when trading commences?

A.

I have no idea. I think that the initial price will be set as sell and buy orders cross one another. This is a highly technical issue. What criteria should be used to limit prices and other questions should be directed at the Tokyo Stock Exchange.

(End)