Press Conference by Yuji Yamamoto, Minister for Financial Services
January 16, 2007
1. Minister's Statement
I made a statement about my visit to Britain and the United States. Specifically, I visited Britain and the United States from January 7 to January 14. In Britain, I met Mr. Mervyn King, Governor of the Bank of England, Sir Callum McCarthy, Chairman of the Financial Services Authority and other such officials. I also visited education and training facilities targeted at young people and met interested parties in relation to the ''Challenge Again'' initiative. In the United States, I met Mr. Ben S. Bernanke, Chairman of the Federal Reserve Board (FRB), Mr. Christopher Cox, Chairman of the Securities and Exchange Commission (SEC), and Mr. Timothy F. Geithner, President of the Federal Reserve Bank of New York. In the series of meetings, we exchanged opinions on the policy direction that Japan should pursue in the future and other matters, in order to improve the international competitiveness of the Japanese financial market. We also agreed to further deepen the collaboration between the financial authorities, amid the progress of globalization. In regards to policy measures targeted at young people, I expressed my intention to enhance related facilities by drawing upon Britain's experience. I reported that this trip was extremely fruitful in that I was able to directly hear the voices of the financial authorities and market players in Britain and the United States-the two biggest international financial centers-and thereby enhance our ties and dialogues with them, in addition to gaining ideas for the ''Challenge Again'' initiative for the future.
My trip was as reported at today's Cabinet meeting. We plan to establish a study group in the Financial System Council in the weeks ahead. Through the opinions I exchanged with the financial authorities, market players and other parties in the two countries serving as the world's two biggest international financial centers, I recognized the importance of making the trend from savings to investment more certain, further improving the appeal of Japanese financial and capital markets as an international financial center. To this end, the Financial Services Agency (FSA) will establish a study group in the Financial System Council to examine policy measures to build an internationally-appealing market. Its provisional name is the ''Study Group on Globalization of Japanese Financial and Capital Markets''. We will seek various opinions in the Study Group and conduct studies in a speedy fashion with the aim of realizing open financial and capital markets.
There are increasing prospects for the Bank of Japan (BOJ) to decide to implement another interest rate hike at the Monetary Policy Meeting scheduled on the 17th and 18th. Objections to this are growing, as exemplified by Mr. Hidenao Nakagawa, Secretary-General of the Liberal Democratic Party, indicating that he would not refrain from exercising the right to demand a postponement of the decision. What are your views on another interest rate hike and the exercise of the right to demand a postponement of the decision?
We fully understand that they have concerns over the economic climate from their respective standpoints. There are various causes of concern when the approach to monetary policy is considered assuming that economic trends vary from region to region, or put differently, there are winners and losers by region, before the House of Councilors election. However, at the macro level, the BOJ has exclusive control over monetary policy unilaterally, and we are in the position to show maximum respect for its decision. In particular, BOJ's message is that it is closely observing consumer price trends, so BOJ will handle the matter while conducting a series of studies on consumer prices at a time like this when we are about to break away from deflation. We also expect its accountability to be fulfilled by the discussions at BOJ's Monetary Policy Meeting.
Do you have a rough idea about when some kind of conclusion will be reached with respect to the Study Group?
We have submitted a list of a certain number of people, and we are currently examining the profile of candidates for Study Group members in detail. We hope to promptly determine the members, the convocation time and date of meetings and the deliberation schedule. After today's press conference, I intend to approach a number of candidates specifically.
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