>>Does it look like to you that this earnings season theme is to take accounting and other charges now <<
I'd say yes, except company outlooks don't seem to say that, particularly among the big industrials. I think there may be some of that going on, however, as there should be in the current climate.
UTX has broken 70 pretty cleanly.
Is there any reason they even need to say this?
Japan says won't default on bonds, vows discipline
(Updates with more detail on tax revamp)
TOKYO, April 18 (Reuters) - Japanese Vice Finance Minister Toshiro Muto said on Thursday that Japan would not default
on its huge public debt, despite a cut in its sovereign rating by Standard & Poor's this week which implies a higher credit risk.
Despite public sector debt totalling more than 130 percent of gross domestic product, Japan was running a huge current
account surplus, had the world's biggest foreign exchange reserves and its citizens held some 1,400 trillion yen ($10.7 trillion)
of financial assets, he said.
Although the government is contemplating tax cuts to reinvigorate the struggling economy, it would also raise taxes in some other areas to maintain revenues and keep its deficit in check, Muto added.
``We do not think there is any possibility that Japan will default on its government bonds,'' Muto told a news conference.
``Our economy is not inferior to any other, including that of an AAA-rated country. If you consider our balance of payments position, foreign reserves and 1,400 trillion yen ($10,710 billion) of assets held by households, I think you will understand what I am saying,'' he added.
Ratings agency Standard & Poor's Corp on Monday slashed Japan's sovereign standing by one notch to AA-minus, the lowest among major industrialised nations and the same level as Malta's.
Muto's response was the latest in a string of outcry among Japanese officials complaining about the action.
TAX CUTS, TAX HIKES
Muto said Japan would continue trying to keep its budget deficit in check and any tax cuts that would be included in a
sweeping tax reform planned next year would be revenue-neutral.
Asked if tax hikes could be avoided if tax cuts boosted the economy and increased revenues, Muto said Finance Minister
Masajuro Shiokawa has made clear that he wanted revenue-boosting steps written into legislation.
``We will not pin our hope on such an increase. It is possible in economic theory but it does not necessarily work that way in
reality,'' Muto said.
He added, however, that tax rises need not come in the same fiscal year as tax cuts without elaborating on how long the lead
time could be.
Earlier this week, Shiokawa said any upcoming tax cuts and rises must offset each other over a certain period of time.
``The wording suggests that they don't have to be in the same fiscal year. If they did, it would have been made clear. But this
doesn't mean they can't be in the same year either,'' Muto said.
The government plans to adhere to Prime Minister Junichiro Koizumi's policy of keeping new bond issuance to 30 trillion yen a
year for the fiscal year which began on April 1, but some flexibility might be needed for the following year, Muto added.
The government has said it aims to limit the absolute amount of spending from fiscal 2003/04 onwards, rather than the amount
of bond issuance, because fluctuation in tax revenues would make the latter a moving target that is more difficult to follow.
($=130.70 Yen) |
