Press Conference by Shozaburo Jimi, Minister for Financial Services

(Excerpt)

(Friday, April 27, 2012, from 9:25 a.m. to 9:38 a.m.)

[Opening Remarks by Minister Jimi]

Good morning. Arrangements are being made for my visit to India and Thailand from Sunday, April 29, to next Saturday, May 5. During the visit, I am planning to attend the first Japan-India ministerial economic dialogue meeting, exchange opinions with financial officials in India and Thailand, and discuss the current status and future outlook of the postal businesses in the two countries with the authorities there.

That is all I have to say.

[Questions & Answers]

Q.

I understand that today is the deadline for the submission of answers to the second-round survey on companies managing customers' assets under discretionary investment contracts in relation to the AIJ problem. This is a matter of very strong interest for the people. Could you tell me whether other companies facing problems similar to the AIJ problem have been identified, although this may be a sensitive question? If so, what would a more in-depth third-round survey be like?

A.

The deadline for the submission of reports in the second-round survey on companies managing customers' assets under discretionary investment contracts is Friday, April 27, so we are scheduled to receive the reports from all companies surveyed by the end of today. From now on, the Financial Services Agency (FSA) plans to grasp the actual state of asset investment for each customer in detail through close examination of the reports and hearings.

As I told you at my previous press conference, we have not decided what to do with the results of the second-round survey, including whether to publish them, since it is possible that there may be cases that require a more in-depth survey or an additional inspection by the Securities and Exchange Surveillance Commission.

Another important thing is that we will also gradually hold hearings with companies managing customers' assets under discretionary investment contracts that were not covered by the second-round survey.

As to what results are expected, it would be better for me to refrain from making comments with prejudgment, as I said previously in relation to the question concerning remarks made by the Senior Vice Minister of Finance.

Q.

The credit rating agency Standard and Poor's downgraded Spain's rating by two notches. How do you expect that will affect the market?

A.

As for the European situation, long-term interest rates have been fluctuating recently. While the Greek problem is said to have been brought under control for the moment, a general election was held in Spain. Yesterday, I happened to see a TV program pointing out that support for established parties has been declining sharply, and it occurred to me that in Japan, a similar phenomenon may arise. Although concerns over the European fiscal problem have not been dispelled, the financial and capital markets of European countries have generally been recovering in the past several months because of efforts made by the euro-zone countries and the European Central Bank (ECB).

However, as was mentioned just now, there are somewhat unstable movements in the markets due to concerns over Spain's financial position. While I would like to refrain from commenting on market developments, I, as the Minister for Financial Services, will continue to carefully monitor market developments with strong interest while maintaining cooperation with relevant ministers and the Bank of Japan (BOJ).

Q.

There is growing pressure on the BOJ to implement monetary easing. Do you have anything to say about the BOJ's monetary policy?

A.

As you know, the BOJ has independence as the central bank, which is a key element of the monetary policy. Overcoming deflation is a major objective of the government. My understanding is that the BOJ is also making effort toward the objective.

In this respect, when the law that recognizes the BOJ's independence was written, I was vice chairman of the Policy Research Council (of the Liberal Democratic Party), and there was much controversy over the law. Mr. Taku Yamasaki, a senior colleague of mine, was chairman of the council, and Mr. Yoshio Kimura and Tsutomu Takebe, who is one term my junior, and I were members of the LDP's investigation commission on financial issues. After one hour of heated discussion, we wrapped up a bill by the deadline. The BOJ has thus been granted independence based on the lessons learned in the past.

I run in nine elections. All of us who seek elected office hope in our hearts to see favorable economic conditions. When the economic condition was bad, particularly in the prewar period, there were cases in which central banks came under pressure depending on the political circumstances of the time. Based on that lesson, some degree of independence has been granted to central banks in most countries around the world.

Nonetheless, the BOJ is a national organization, and overcoming deflation is a major national objective. Therefore, I hope that the BOJ will take appropriate action toward the objective. In fact, I understand that the BOJ is working hard toward the objective.

Thank you very much.

(End)