"He quickly discovered that his comments can move the markets. The yen
took an early dive in Tokyo trade after he said the markets would decide
the value of the currency. Later he said the government would, of
course, intervene if necessary".
Isn't that what Hashimoto used to do for many months?
œ30bn tax cut pledge to fix Japan economy
By Juliet Hindell in Tokyo
JAPAN'S new Prime Minister, Keizo Obuchi, promised huge tax cuts on his
first day in office yesterday and pledged to fix the economy within two
years.
He said there was no "superman" who could cure the country's economic
ills on his own but he would take "speedy" action. Mr Obuchi promised to
keep campaign promises to implement œ30 billion tax cuts as soon as
possible, financing them with government bonds.
He acknowledged that there might be doubts about his ability to deal
with economic issues, given that he had never worked at the Finance
Ministry or held other relevant posts during his political career, but
he said his family had run a small business so he was not totally
ignorant about the economy.
He said he believed that his newly appointed Finance Minister, Kiichi
Miyazawa, was the most suitable person to deal with the "confused"
situation. But he has also appointed a specialist financial diplomat,
Toyoo Gyohten, to explain Japan's policies abroad. International
pressure is mounting to see quick results. Madeleine Albright, the
American Secretary of State, said: "I think Mr Obuchi knows that he
doesn't have a lot of time."
He quickly discovered that his comments can move the markets. The yen
took an early dive in Tokyo trade after he said the markets would decide
the value of the currency. Later he said the government would, of
course, intervene if necessary. As he started work, there was a reminder
of just how serious the situation is. Japan's unemployment rate in June
was reported to have jumped from 4.1 per cent to 4.3 per cent, the
highest level yet.
Men between the ages of 35 and 44 were worst affected, but job losses
were high in all sectors, with a total of 2.84 million people out of
work. The jobless total was 550,000 higher than for the same month last
year. Most economists believe that unemployment will continue to rise
and expect it to reach five per cent by next January.
But unemployment is just one of the problems Mr Obuchi faces: Japan is
mired in its worst recession since the Second World War; the country's
banks are saddled with unrecoverable loans of at least œ400 billion and
negative growth is forecast for the near term.
It is a huge challenge for the man dubbed "Mr Ordinary" but he gave a
solid if unexciting first live television performance. He spoke without
notes and brushed off a gaffe made by the new agriculture minister.
Shoichi Nakagawa, 45, said yesterday that there was no proof that
so-called "comfort women" had been forced into prostitution for the
Japanese army during the Second World War. He later retracted the
comment.
telegraph.co.uk
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