Provisional translation

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


June 9, 2009

[Opening Remarks by Minister Yosano]

The cabinet meeting proceeded based on the predetermined agenda, and no particular topic was discussed at an informal meeting of cabinet ministers.

[Questions and Answers]


Improvement in sentiment on the prospects of the economy has become evident, as shown by an economic watchers survey released yesterday and the recent rise in stock prices. Could you tell us about your view on the state of the economy?


Stock prices, which are said to predict the state of the economy six months from now, have been moving above 9,500 (as measured by the Nikkei average), temporarily rising close to 10,000. As a leading indicator, stock prices are predicting that the Japanese economy will be recovering around six months from now. Moreover, as the Tokyo stock market’s recovery is lagging compared with the recovery rates of Asian stock markets, foreign investors regard Japanese stocks as relatively cheap and are willing to buy them. Thus, the stock price level is one indicator of an economic recovery. Sentiment on the economy as measured by the economic watchers survey has also been improving for five consecutive months. Moreover, as inventory adjustments have come to an end in various manufacturing sectors, several statistics are showing growth in production activities. Also, the decline in exports in April was less steep than the decline in the January-March quarter. We have seen various positive indicators. While we hope that this trend will continue, it will be necessary for us to carefully watch the downward risk that the Japanese economy faces and act quickly.


While stock prices are rising, commodity prices, oil prices in particular, have recently been rising gradually, too, and a further price rise could have various implications. Could you tell us how you view the substantial rise in markets other than the stock market, such as the commodity market?


Commodity prices may be rising because of actual demand. I think that it is evidence of a recovery in investors’ confidence that they are starting to invest not only in stocks but also in commodities, crops and industrial products. Although I do not know what the appropriate level of oil prices is, we must keep in mind that prices quoted in the New York market are the contract prices at which crude oil is traded.


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