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To: Steve Fancy who wrote (6493)	8/11/1998 3:37:00 AM
From: Steve Fancy	Respond to of 22640

Japan Government Downgrades Official Assessment of Economy By DAVID P. HAMILTON Staff Reporter of THE WALL STREET JOURNAL TOKYO -- The Japanese government downgraded its official assessment of the economy, while the nation's top financial official said the government is considering possible additional sales of shares in giant Nippon Telegraph & Telephone Corp. as a way of helping to pay for the government's spending and tax-cut plans. Japan's Economic Planning Agency said Tuesday morning in Tokyo that continued worsening in personal consumption had led the agency to revise its description of the economy in its August report to "sluggish" from "stagnant." In the highly nuanced world of EPA reports, which are scrutinized for minor word changes from month to month, the change is a relatively dramatic one for the conservative agency. The EPA had characterized the economy as "stagnant" since February. New Recognition of Spending EPA officials briefing reporters said the report reflects a new recognition that consumer spending, which has been in the dumps for almost 18 months, shows no signs of recovering any time soon. Indeed, the agency deleted a phrase from its July report in which it suggested "there are some signs of recovery" in personal spending. The agency further noted that rising "involuntary job losses" stemming from bankruptcies and corporate restructurings have pushed unemployment to a record high of 4.3%, and added that business investment in the April-June quarter is likely to be much lower than it had previously forecast. Markets Are Roiled Meanwhile, Finance Minister Kiichi Miyazawa roiled stock and currency markets Tuesday morning when he said the government might intervene in the currency markets to prevent undue "disruption." Separately, he acknowledged that the government might consider selling NTT shares as "one possibility" for limiting the additional budget deficits likely to result from Prime Minister Keizo Obuchi's plans to stimulate the economy. The Japanese government still holds two-thirds of the giant telephone company, which was quasiprivatized in the mid-1980s. Mr. Obuchi had himself briefly hinted in a speech last Friday at the possibility of privatizations and asset sales as a way of helping limit the deficit. Mr. Miyazawa said Tuesday that "the options aren't limited to the sale of NTT shares. We can also sell other nationally owned assets and privatize national businesses." NTT shares fell sharply amid an overall decline in the market on the news, which followed a report in the daily Yomiuri Shimbun that the government may consider selling as many as one million shares of NTT. The Nikkei 225 stock average was down 72.42 points to 15554, at the close of Tuesday's morning session. The yen, meanwhile, traded at 146.30 to the dollar around midday, up slightly from 146.45 earlier in the session.