Press Conference by SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Friday, July 5, 2024, 11:16 am to 11:25 am)

Q.

The Nikkei Stock Average and the TOPIX index both hit new all-time highs yesterday.
This morning as well, they temporarily  hit the highest levels. How do you think the recent high stock prices and what do you think lies behind the strength of Japanese stocks? 

A.

Of course, I know that the Nikkei Stock Average and the TOPIX index renewed record highs, but stock prices are determined in the market based on various factors, such as individual companies' business activities and investors' expectations toward the future, not only on economic conditions. Therefore, please understand that it would be difficult to provide a simple explanation on the background or the like regarding stock prices.
Nevertheless, I recognize it important to attract funds from inside and outside Japan to create a virtuous cycle of growth and distribution, thereby making the Japanese economy stronger. We would like to continue proceeding with initiatives for turning Japan into a leading asset management center, while promoting corporate governance reform and developing Special Zones for Financial and Asset Management Businesses.
The national government will steadily cope with the tasks at hand in the same manner as before instead of swinging from joy to sorrow with changing stock price levels.

Q.

Regarding high stock prices, until recently, a weak yen and high stock prices were considered as a set. However, do you think that a boosting effect of the yen's depreciation is one of the factors behind the recent high stock prices?

A.

Relations between stock prices and exchange rates vary due to many different factors, I think.
Only from one side, it may be said that the yen's depreciation triggers investors to buy stocks of exporting companies or the like, but in reality, there are various factors that have an effect in a complicated manner, and it would be very difficult to provide a simple explanation on the relations among those factors.
Anyway, we would like to closely watch the status of stock prices and exchange rates with a sense of tension. 

Q.

Decisions on automobile insurance made by the General Insurance Rating Organization of Japan have almost always leaked before official announcements. I think the problem is that the official decisions of the FSA or other organs substantially confirm the leaked details.
From the perspective of protecting insurance policyholders, methods for information management and information disclosure by the Organization should be specified.

A.

When the General Insurance Rating Organization of Japan decides on revisions, etc. of reference loss cost rates of automobile insurances at its council and filed a notification with the FSA, the FSA is to give a notice on the results of the examination of the content of the decision to the Organization. I know that there was media coverage concerning information leakage during that process.
Needless to say, the General Insurance Rating Organization of Japan and member non-life insurance companies should strictly manage information in the relevant process.
The FSA, as a supervisor, will request them to properly manage information.
Regarding methods for information disclosure, the Organization is expected to deliberate on appropriate methods from the perspective of balancing proper information management and transparency in the process.