Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services

(Friday, July 11, 2014, 10:45 am to 11:04 am)

[Questions and answers]

Q.

The growth strategy also includes the target of enhancing Tokyo’s status as an international financial center. A panel of experts, for example, has suggested expanding the Pro-Bond Market, but as Minister, please tell us what you think is required to enhance Tokyo’s status as an international financial center.

A.

Lots of potential ideas exist, so this isn’t something I can explain in simple terms at a press conference by just reeling off a list of measures. There are just so many details. Having said that, more than 860 trillion yen of the 1,630 trillion yen in personal financial assets is being held as cash or deposits, as is more than 200 trillion yen in corporate retained earnings. So a total of well over 1,000 trillion yen is just lying idle in the form of cash or deposits. We have to look at how much money is not working there, because money isn’t something that should be allowed to pile up. It needs to be circulated. So taking proper account of that, Tokyo offers low interest rates and is safe. In many ways, this country has enough potential to allow it to function adequately as Asia’s financial center. Most things that are difficult to achieve in other countries are already in place here. Take safety, for example. You can’t make a place safe overnight, but top-flight professionals can come here and walk around without a bodyguard, without fear of their children being abducted. So in many ways, I think the conditions in Tokyo can work in our favor. In addition to these conditions, thanks to Abenomics, the financial sector is getting more active, and there is no doubt that share prices are rising. Everyone thought they would keep falling, but instead they have risen, then stopped rising, then started rising again, and then continued rising. They won’t go back to the previous low. The Nikkei has now gone from 14,000 yen to 15,000 yen. It hasn’t gone under 15,000 yen even though people kept saying it would. Interest rate is at 0.54%, I think, which is more peculiar, and they are falling, so if conditions of the Japanese market would be improved that would send a big message to the international market that you can make money here. If Japan can be expected to offer freedom, money-making potential, and growth potential, backed by a trusted currency market, then the market will naturally move to Japan. There is another issue about regulations that are stopping this happening, but anyway things will initially progress in that direction. Becoming center of financial market is by no means a bad thing.