Press Conference by Shizuka Kamei, Minister for Financial Services

(Excerpt)

(Friday, May 7, 2010, from 9:50 to 10:19)

Q.

Greece's fiscal crisis is beginning to have a severe impact on stock markets worldwide. How will it affect the Japanese economy?

A.

As you may already be aware, the impact from Greece is spreading across the world, not surprisingly. The primary concern is how the European Union (EU) itself would respond to this, and indeed, the EU is currently working hard on it, but ultimately, it will inevitably affect Japan as well. As to whether or not Japan itself has any means to control such impact, regrettably, it has no means to completely shield itself from it, especially in regard to financial markets. Even today, the Nikkei average plummeted by four hundred yen or more. Given that there has been such an impact, I believe, after all, that Japan must determine ways to strengthen itself from within, and ways to implement efforts that are unique and feasible to Japan, while experiencing such global ups and downs, both big and small.

Of course, efforts should be made to take measures to prevent the Japanese economy from being affected by external factors in various ways, but as far as its real economy is concerned, Japan itself is in an unusual state compared to others around the world, in that it has not overcome the deflationary gap or spiral. The real economy itself is sagging. Shouldn't we seriously consider how to tackle this situation, based on Japan's own efforts?

When its real economy is strong, Japan can shield itself from various influences from other countries to a certain extent. Conversely, when its own economy is weak, Japan is heavily affected. That is why I believe we must make our utmost efforts to determine ways to strengthen the Japanese economy itself from within.

Q.

Concerning Greece, Japanese financial institutions presumably hold government bonds and other such financial instruments of Greece. Will there be an impact in that regard? How will Japanese financial institutions be affected?

A.

Do they have such holdings? Regrettably, at this point in time, I am not aware of the details, as to how much has been purchased, by which bank. In any case, they are being bought and sold all the time. While I do not have the exact figures, I presume they do not hold massive volumes.

(End)