Provisional translation

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


March 24, 2009

[Opening Remarks by Minister Yosano]

The cabinet meeting proceeded according to the predetermined agenda.

As Minister for Financial Services, I will report on the extension of the temporary measures regarding the short-selling of stocks and purchase of own shares by listed companies, which were introduced to remain in effect until the end of the current fiscal year. As for the restriction on the short-selling of stocks, in light of the stock market condition, we have introduced additional measures, such as prohibiting so-called naked short-selling, which refers to the short-selling of stocks without first borrowing the stocks, while regarding purchases of own shares, we have taken measures such as raising the ceiling on daily purchase volume. These provisional measures were to remain in effect until March 31 this year. We believe that from the viewpoint of preventing unfair trading amid the market instability, it is appropriate to continue these measures for a while. Therefore, we have decided to extend these measures until the end of July and we plan to promulgate relevant Cabinet Office ordinances and notices within the current fiscal year. I do not have any further statements to make.

[Questions and Answers]


The United States has announced a plan to purchase troubled assets totaling up to one trillion dollars. Could you tell us how you assess this plan and what impact you expect it will have on the financial market and the real economy?


Non-performing loans and assets will have to be disposed of sooner or later. The process of disposing of them and removing them from the balance sheets is necessary. I believe that the fact that the United States has started to work on this process represents significant progress. So, I expect that the announcement of this plan will have a very positive impact on the financial and industrial sectors as well as on the people and the entire world.


Now that stock prices are on a recovery trend, what do you think of the need to take stock price-supporting measures, such as purchasing stocks in the market or purchasing ETFs (exchange-traded funds)?


Stock prices often betray the expectations of the people. Stock prices have not yet recovered to a level that would prompt us to abandon what we have been considering until now.


Data on published land prices show that prices declined for the first time in three years, and this may raise concern about a slump in personal consumption due to the negative wealth effect as well as about curbs on new loans and forcible collection of outstanding loans due to a decline in the value of collateral. In light of this, how do you view the data on published land prices, which were announced yesterday?


Published land prices fell across the country. After the bursting of the economic bubble, everyone acted on the assumption that the fair price of land was the value based on discounted cash flow, and more than five years ago, a mini bubble occurred in downtown areas and commercial districts of big cities in particular. A correction phase has now started. Although the correction has spread to residential areas, the prices of residential land have fallen far less sharply and remain more stable than those of commercial land. I understand that the current situation indicates that a temporary bubble-like phenomenon has disappeared because of the global credit crunch.


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