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

(Excerpt)

June 6, 2006

Q.

Yoshiaki Murakami, the representative of Murakami Fund, was arrested yesterday. At the risk of sounding premature, please describe what the challenges will be after the enactment of the Financial Instruments and Exchange Law, such as enhancing the surveillance of the securities market.

A.

Firstly, I believe the Securities and Exchange Surveillance Commission (SESC) fully performed its function again in this incident. Although their work is low-profile, the series of actions taken by the Tokyo District Public Prosecutors Office were supported by SESC in all aspects of the interpretation of laws, collection of materials and so forth. While SESC does not by nature come to the forefront in criminal cases, in my opinion it has fully accomplished the mission it was given.

The bill for the Financial Instruments and Exchange Law, which is currently in the final stages of deliberation at the House of Councilors, provides for certain funds. It is the product of hard work by the Financial Services Agency (FSA) based on two ideas, namely, that investors must be protected by such means as disclosure of information and that the Japanese economy should be stimulated through free economic activities. At the present stage, I cannot think of any provisions that should be added.

I therefore think it is our best piece of work at this point, although after the Financial Instruments and Exchange Law is approved at the Diet, there might be various matters that need to be considered in the course of its implementation.

Q.

In relation to Yoshiaki Murakami who was arrested yesterday, allow me to confirm this, just in case, ''Have you ever received political donations from him, and have you had any relations with him personally or in the context of asset management?''

A.

While I was serving as the Minister of International Trade and Industry, he was a staff member of the Ministry of International Trade and Industry, so I have known him since then. He participated in my lunch study meeting a few times, and I received participation fees in the form of political donations. This has already been reported under the Political Funds Control Law, and I responded to the questions at the Diet accordingly.

I have no assets whatsoever entrusted to Murakami Fund. I therefore have no investment relations with him at all.

Q.

This morning, the Nikkei average opened more than ¥200 lower. Having stated yesterday that his arrest would have no impact on the market, what are your views now based on your observations of the situation today?

A.

The sentiment in the securities market weakened because the prospects for monetary policies became uncertain in countries across the world, not because concerns have arisen over the outlook for the Japanese economy; the current sentiment is not unique to Japanese investors but is shared by investors around the world. I am convinced the market will regain its stability after a certain period, and in this day and age, we should not be surprised or disturbed by slight drops in the Japanese market. We should calmly accept that shares go up and down.

(End)