FINALLY THE TALK OF TAX CUTS!!!!!!!!!!!!!
Delay in reform package sends Tokyo stocks reeling
PM pledges only to 'take every possible step' to avert crisis
By Anthony Rowley
A
WIDELY-ANTICIPATED package of measures to bolster Japan's financial institutions and reflate the economy failed to materialise yesterday, sending the Nikkei stock index sliding below the 16,000 level.
In his speech last night, Prime Minister Ryutaro Hashimoto only pledged to "take every possible step" to avert a full-blown financial crisis in Japan. He stopped short of spelling out what measures his government will take.
A bill aimed at promoting mergers of ailing banks by revising Japan's deposit insurance law was approved by a full session of parliament's Upper House. Cabinet ministers are now expected to put the finishing touches to the full package, expected to be announced on Monday.
The Nikkei 225-share index fell by 145.85 points, or 0.9 per cent, yesterday to 15,904.3.
Signalling further weakness ahead, the Nikkei March futures shed 150 points to 15,950. The yen, too, slid lower to close at 130.6 to the US dollar in Tokyo.
Yesterday was a black Friday in Tokyo. Bank of Japan governor Yasuo Matsushita admitted that the slowdown in Japan's economy is intensifying as a result of weak personal consumption.
"Inventory adjustment is continuing in constructionrelated industries and industries that produce durable goods. Production is rather weak, and this seems to be having an impact on employment and incomes," he said.
Meanwhile, total debts held by bankrupt companies in November surged 29.8 per cent from a year ago to 2.01 trillion yen (S$25.5 billion), the second-highest monthly figure ever, Tokyo Shoko Research said. The number of failures was up 5.6 per cent while the debts of bankrupt firms more than quadrupled from the 486.96 billion yen in October.
Hokkaido Takushoku Bank, which collapsed recently under massive bad loans, has liabilities exceeding assets of one trillion yen, according to a press report. The huge amount of excess liabilities, which is expected to be covered by the Deposit Insurance Corporation, was discovered by a finance ministry team inspecting the failed institution, the Asahi Shimbun reported. A spokesman for the bank would not confirm the report.
A tax panel of the ruling Liberal Democratic Party will propose tax cuts of around 500 billion yen for fiscal 1998, which begins on April 1, Japanese media also reported yesterday. The reports said the panel was leaning towards a net reduction of between 100 billion and 200 billion yen in corporate taxes.
The panel was also considering halving the securities transaction tax in 1998/99, freezing the land-value tax and shaving the tax rate on capital gains from land sales. |
