Still wildly bullish? More bribery, scandals, etc.
i still think nikkei is a good buy, but i don't think it will will be straight up--remember what happened after the last rally over 20K
------------------------------------------------------------------------
Tuesday January 27, 7:22 am Eastern Time
Japan fin min candidate catches pundits off-guard
By Linda Sieg
TOKYO, Jan 27 (Reuters) - Reports that former Defence Minister Sohei Miyashita might be tapped as Japan's next finance minister caught analysts off-guard on Tuesday, but some said the choice could disappoint markets keen for a signal that bold steps were in the pipeline to boost the economy.
Japanese media said Miyashita, who has also served as environment minister and is a former Finance Ministry bureaucrat, was a strong candidate to replace Hiroshi Mitsuzuka.
Mitsuzuka said on Tuesday he would would tender his resignation on Wednesday to take responsibility for a scandal over allegations that ministry inspectors took bribes from banks.
Ruling Liberal Democratic Party (LDP) leaders decided to offer Mitsuzuka's resignation in hopes of winning opposition support to pass a supplementary budget for the business year to next March 31 as well as legislation that would allow up to 30 trillion yen ($238 billion) in public funds to be used to stabilise the financial system, hit by a crisis of confidence late last year.
Jiji news agency, however, reported that while the opposition had agreed to support passage of the extra 1997/98 budget -- which includes a one-off two trillion yen income tax cut -- in parliament's key Lower House on Wednesday, the financial stabilisation bills would be dealt with separately.
Market pundits pondering possible successors to Mitsuzuka earlier had speculated his removal could clear the way for a major shift away from Prime Minister Ryutaro Hashimoto's tight fiscal stance toward bolder steps to boost the stalled economy.
But analysts said that if Miyashita were chosen it would show more about old-style factional politics than policy.
''He is in the Mitsuzuka faction and Hashimoto's first priority was to keep the balance of power,'' said Shigenori Okazaki, associate director of economic research at SBC Warburg. ''We can't expect the shift in economic policy that the market was looking for.''
Japanese media also reported that Economic Planning Agency Minister Koji Omi and LDP policy chief Taku Yamasaki had agreed on Tuesday to draw up a fresh economic package by February 20.
But Jiji said the steps would include a proposal to revalue companies' land assets and steps to ease the terms for firms to buy back their own shares. No mention was made of added tax cuts, which many economists say are needed.
Some analysts said the choice of a former Finance Ministry official to head the ministry, the image of which has been battered by a string of policy missteps in recent years, might dampen public hopes that real ministry reform was in store.
''He might be a smart guy, I don't know, but it doesn't help the credibility problem,'' one foreign economist said.
SBC Warburg's Okazaki said, however, that the selection of Miyashita would suggest that ruling politicians were keen to have someone at the top who at least understood the problems facing the economy and the financial system. ''They wanted to have someone who knows about the process,'' he said.
Japan's economy has been stopped in its tracks -- some would say knocked back into recession -- by a tight fiscal stance implemented from April, by Asian economic turmoil and by a tight lending stance by banks burdened with bad loans and struggling to meet tighter capital-adequacy standards. |
