Press Conference by Kaoru Yosano, Minister of Finance and Minister for Financial Services and Economic and Fiscal Policy
February 20, 2009
[Opening Remarks by Minister Yosano]
The cabinet meeting proceeded based on the predetermined agenda. I have no particular statements to report to you from the informal meeting of cabinet ministers, either.
[Questions and Answers]
This morning Japan time, (the Dow Jones Industrial Average) closed at 7,465 in the New York market, marking the lowest point in six years and four months. Could you tell us what impact you expect on the Japanese market and how you feel about this?
U.S. stock prices have continued to drop, although they temporarily recovered, as several causes for concern remain...for example, a final decision has not been made as to how to deal with the Big Three. However, GM and Chrysler need funds. While major banks are being dismantled, there are rumors of nationalization, an arrangement which Americans do not necessarily like. As for the overall condition of the economy, the unemployment rate will probably rise and there are various other causes for concern, which I think have been reflected in the stock market. Japanese stock prices are so closely linked to U.S. stock prices that the Tokyo market is said to be a mirror image of the New York market, and, although it is not clear what impact there will be on the Tokyo market, the Prime Minister is resolved to prevent the bottom from falling out of the Japanese economy by all means. So I believe that all of us — the cabinet, the parties and the Diet — must do our parts to return the economy to a normal flying altitude by taking every possible policy measure available.
Following the resignation of former Minister Nakagawa, you were appointed to serve in three posts, which is an unusual arrangement. Although you have served for only a short period of time, how have you felt during the past several days? Some are wondering if it is more difficult than you expected. Could you tell us about your impressions?
The biggest problem is that I am at a loss as to which ministry I should go to.
As for economic and fiscal affairs, I should consider various economic matters in cooperation with the parties, and as for my role as Minister of Finance, I must ensure the passage of the budget and related bills, a task on which Minister Nakagawa was working. I must obtain the understanding of the Diet by properly answering questions. These are the missions I must accomplish. Regarding the duties of the Minister for Financial Affairs, as Commissioner Sato (of the Financial Services Agency (FSA)) undertakes the management of detailed, daily affairs related to bank administration, I should work to facilitate credit flow in the period up to the end of March. In this regard, the FSA must cooperate with the BOJ (Bank of Japan) and seek the support of the banking industry. Also, we are pinning our hopes on a major role being played by financial institutions engaging in policy-based finance as well as the DBJ (Development Bank of Japan) and JBIC (Japan Bank for International Cooperation), which are still owned 100% by the government.
Thus, there are a variety of tasks, including major and minor ones, and I intend to perform my duties properly in cooperation with the staff of each government organization.
Some people expect that the period of your concurrently serving in three ministerial posts will end soon. What do you think of this view?
Please ask the Prime Minister or the Chief Cabinet Secretary about that.
Regarding the issue of stock prices which was mentioned earlier, do you think that any additional stabilization measures will have to be taken if stock prices are expected to drop sharply?
Although there is a voice calling for PKO (price-keeping operations) within the parties, PKO has not yet been established as a system, and the scope of stocks eligible for purchases by the BOJ and for purchases under legislation proposed by Mr. Yanagisawa is limited in either case. However, whether or not the scope should be expanded to cover stocks in general remains a fundamental question in the capitalist economy.
If the bottom were to fall out of the economy, it would point to a lack of economic measures. As there are people who are seriously considering matters like these, I think it is too early to talk about the direction in which the situation will develop.
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