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Strategies & Market Trends : JAPAN-Nikkei-Time to go back up? -- Ignore unavailable to you. Want to Upgrade?

To: fut_trade who wrote (1275)	7/18/1998 10:22:00 PM
From: chirodoc	Respond to of 3902

Saturday July 18, 1:18 pm Eastern Time Tsushima says new Japan leader to speed bank reform ....looks like tax cuts are a shoe in...curtis By Al Yoon CHATHAM, Mass., July 18 (Reuters) - Yuji Tsushima, member of Japan's parliament, on Saturday said the impending change in leadership of the ruling Liberal Democratic Party (LDP) will speed the banking reform necessary for full recovery in Japan's economy. Responding to a question whether the transition in the LDP's top post would upset the momentum of reform, Tsushima said, ''I don't think so ... it will accelerate the banking reform.'' The party has said it will elect a new prime minister on July 24 to replace Ryutaro Hashimoto, who resigned following the party's surprising setback in last week's Upper House parliamentary elections. Tsushima, parliamentary vice finance minister, stressed the LDP would use the change in leadership as an opportunity to redefine policies so that they are more focused on swift recovery of the Japanese banking system and the economy as a whole. The LDP member spoke to reporters during a symposium for U.S. and Japanese government officials, bankers and academics on the Asia crisis and Japan's Big Bang reforms here in Cape Cod. He also said the consensus of LDP members was that permanent tax cuts are a necessary part of reforms to take the economy out of recession. But the issue of banking reform -- and dealing with some $600 billion in bad debts -- was perhaps most pressing. ''We should not forget that without banking reform, any stimulus measure will be nullified by the inflow of capital from Japan,'' Tsushima said, adding that both issues were quite important and urgent. With a draft of a bank reform bill ready for presentation to the DIET, he said the tax research committee of the LDP and government ''must work hard before we can formulate the draft (of tax reform) ... it will take some time,'' Tsushima said, adding that formulating a consensus with opposition parties was a difficult task. Tsushima said U.S. Deputy Treasury Secretary Lawrence Summers, who addressed the closed-session symposium on Friday, understood Japan has many problems involving far more than reducing tax burdens. A symposium source said discussions seemed to produce consensus that some Japanese banks will have to fail in the process of cleaning up the morass of bad Japanese loans. He added that talks about possible solutions for sounder management -- including the imposition of higher capital adequacy ratios on Japanese commercial banks -- have been ''pretty brutal, and very frank.''