Defrocked, good note!
<<Look for AG to make another equity valuation warning at a minimum.>>
Me thinks so too. Great minds think a like! Or is it the bears...? -g-
The stimulous package from Japan has everything but, guess what, stimulous package. I expect some fireworks in Japan on Monday.
biz.yahoo.com
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Friday February 20, 5:23 am Eastern Time
Japan LDP unveils econ package but no fiscal boost
By William Mallard
TOKYO, Feb 20 (Reuters) - Japan's ruling party on Friday unveiled a package of largely deregulatory measures aimed at
supporting the flagging economy economy and stock market.
But a draft of the package, released just hours before Finance Minister Hikaru Matsunaga was to leave for a G7 meeting in
London, offered none of the fiscal-stimulus spending urged by domestic critics, the United States and other nations.
The draft of the Liberal Democratic Party (LDP) plan obtained by Reuters mentioned no tax cuts or fresh fiscal measures for
the domestic economy. And despite contrary signals in the morning, the LDP policy chief insisted no such steps would be
inserted at the last moment.
''The package is mainly focusing on deregulation measures,'' said Yamasaki, the head of the LDP Policy Research Council,
who was to announce the final plan in the afternoon.
Senior party member Okiharu Yasuoka said later that the package had been added finalised and plans for a common Asian
currency system had been added.
In addition to vowing aid for crisis-hit Asian economies, the draft LDP plan focused on such long-expected steps as revaluing
land assets held by companies and banks, deregulating firms' share buy-backs, promoting the building of second homes and
encouraging private financing initiatives for infrastructure and boosting land liquidity.
Matsunaga said that at Saturday's meeting of Group of Seven (G7) finance ministers and central bankers, he will reiterate that
stimulus measures already undertaken will boost Japan's economy.
The government remains ready to consider further steps, but only after enacting the budget for the fiscal year starting April 1,
Matsunaga said.
The head of the Economic Planning Agency, Koji Omi, said the government will craft measures over the next month or two
based on the LDP package, but that they would not involve revising the fiscal 1998/99 budget.
Yamasaki told reporters the party was likely to compile yet another package in the future -- the fifth in a series of packages
during the current economic slump -- but that the next batch too would likely not have tax cuts.
Prime Minister Ryutaro Hashimoto, addressing parliament, also repeated that large tax cuts would pose a problem for the
fiscal consolidation programme enshrined into law late last year.
Instead, the LDP, in the draft package, focused on easing various restrictions and touted measures already taken, such as two
trillion yen ($15.8 billion) in income tax rebates.
''We are confident that from here on, all of those measures will produce a multiplier effect and that our economy will certainly
have a strong recovery,'' the 16-page draft said.
In the draft, the LDP says it will consider combining the first and second sections of the Tokyo Stock Exchange in order to
boost securities transactions.
The draft calls for considering changes needed to introduce defined-contribution pension schemes, like the ''401K plan'' in the
United States. This is thought to help companies, which must now provide a specific pension benefit, making up shortfalls if
pension fund asset management cannot yield the expected return.
For revitalising the sluggish real estate market, the draft urges consideration of such steps as greater mobilisation of public
institutions.
To promote the use of securities backed by real estate assets, the party would lay the groundwork for establishing
special-purpose companies to handle such securities and for developing U.S.-style real estate investment trusts.
Until such an asset-backed securities market is mature, the government is urged to consider such steps as using public funds to
enable big institutions to buy such securities.
(Updates with finalised package, comments, market reaction; changes byline)
By Yoko Kobayashi
TOKYO, Feb 20 (Reuters) - Japan's ruling party on Friday unveiled a long-awaited, yet uninspiring, package of measures
aimed at supporting the flagging economy and stock market.
The Liberal Democratic Party plan offered none of the fiscal-stimulus spending or tax cuts urged by domestic and overseas
critics -- yet the party immediately sought to turn its attention to promises of future steps.
Coming just hours before Finance Minister Hikaru Matsunaga was to leave for a weekend meeting with his counterparts from
other major industrial powers, the fourth economic package since October to spur the economy did nothing to answer U.S.
and domestic calls for quick fiscal stimuli.
Instead, it vowed aid for crisis-hit Asian economies and focused on such long-expected steps as revaluing land assets held by
companies and banks, deregulating firms' share buy-backs, promoting the building of second homes and encouraging private
financing initiatives for infrastructure and boosting land liquidity.
''It's almost excruciatingly in line with expectations,'' said Peter Morgan, senior economist at HSBC James Capel Japan.
Financial markets shrugged off the plan, with shares up modestly on other factors and the bond market unimpressed.
LDP policy chief Taku Yamasaki tantalised the public with talk of further steps even as he announced Friday's steps.
Yamasaki said he wants the government to put the LDP plan into action next month and indicated the party will take more
action of its own.
''There were comments by LDP members that the party should compile a fifth package'' said Yamasaki, head of the LDP
Policy Research Council. ''I would like to take that into consideration and deal with it and take appropriate steps.''
He declined to say what kind of steps he had in mind, but noted that the book closings of most Japanese companies at the end
of March were a critical time.
Morgan and other economists agreed that the market's focus was already on what Matsunaga would promise the Group of
Seven (G7) at Saturday's meeting in London. After that, the markets expect further fiscal measures, but wonder about the
amount and when the government will begin to signal them.
Matsunaga told a news conference he would reiterate to the other G7 finance ministers and central bankers that stimulus
measures already undertaken would boost Japan's economy.
The government remains ready to consider further steps, but only after enacting the budget for the fiscal year starting April 1,
Matsunaga said.
The head of the Economic Planning Agency, Koji Omi, said the government would craft measures over the next month or two
based on the LDP package, but these would not involve revising the fiscal 1998/99 budget.
Yamasaki earlier told reporters a fifth party package would likely not have tax cuts, and Prime Minister Ryutaro Hashimoto
told parliament that large tax cuts would pose a problem for the fiscal consolidation programme enacted last year.
Instead, the LDP focused Friday's package on easing various restrictions and touted measures already taken, such as two
trillion yen ($15.8 billion) in income tax rebates.
''We are confident that from here on, all of those measures will produce a multiplier effect and that our economy will certainly
have a strong recovery,'' the 16-page package said.
The LDP said it would consider combining the first and second sections of the Tokyo Stock Exchange in order to boost
securities transactions.
It also called for consideration of changes needed to introduce defined-contribution pension schemes, like the ''401K plan'' in
the United States. It is though this will help companies, which must now provide a specific pension benefit, making up shortfalls
if pension fund asset management cannot yield expected returns.
To revitalise the sluggish real estate market, the package urges consideration of such steps as greater mobilisation of public
institutions.
To promote the use of securities backed by real estate assets, the party said it would lay the groundwork for establishing
special-purpose firms to handle such securities and to develop U.S.-style real estate investment trusts. |
