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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 (1538)	10/29/1998 8:34:00 AM
From: chirodoc	Respond to of 3902

we agree peter i am still looking for an entry point but to get in i need to see bank bailout (half done) tax cuts (not done) more deregulation (quarter done) new government (about 2 years off) obuchi may do it but it will take at least two years because he is a consensus builder and not a leader if naoto kahn gets in and the democrats gain control i will buy japan curtis

To: fut_trade who wrote (1538)	10/29/1998 11:39:00 PM
From: chirodoc	Read Replies (2) \| Respond to of 3902

obuchi is desperate--this proves it imho the best buys are korea and hong kong! October 29, 1998 Japan May Use Gift Certificates to Spur Consumers By STEPHANIE STROM OKYO -- A senior adviser to Prime Minister Keizo Obuchi said in an interview Wednesday that the government was highly likely to adopt a plan to issue gift certificates in an effort to spur consumer spending. Although widely regarded here as little more than a gimmick, the plan is being closely watched as a measure of the Obuchi administration's political desperation. Despite opposition from the Finance Ministry, corporate executives and economists, the government may well agree to it as the price for bolstering its shaky support in Parliament. Obuchi's Liberal Democratic Party lacks a majority in the Upper House, a deficit that the opposition used skillfully to shape major sections of banking legislation to its liking and otherwise make trouble for the governing party. The gift certificates are a brainchild of Komeito and Heiwa Keikaku, opposition parties heavily influenced by a lay Buddhist organization, Soka Gakkai. The parties have been flirting with an alliance with the Liberal Democrats for a few weeks. Komeito has 24 members in the Upper House, which would give Obuchi the minimum number of votes, 127, needed to secure a majority there. The government has been urgently seeking a way to beef up its parliamentary power before the beginning of the next session, which could start at the end of next month. The governing party, riven with dissension after its embarrassing failure to secure a majority in the Upper House elections in July, is concerned that it might be unable to derail a motion of no-confidence in the next session. Komeito and Heiwa Keikaku, effectively the Upper and Lower House branches of the same party, contend that the gift certificates would be more effective than tax cuts in having consumers spend, because they could not tuck the vouchers into savings accounts. "I think probably the government will have to do it as a matter of political agreement, although I'm not really for the idea," Obuchi's chief adviser on taxes, Hiroshi Kato, said. Kato said he had advised Obuchi against the plan, but did not give his opinion much chance of swaying the prime minister. "In order to pass legislation, if they ally with the parties that have proposed this plan, then it will be easier to pass bills," he said. "So in order to gain an ally in the Upper House it's possible the party will do this." A spokesman for the prime minister, Akitaka Saiki, said any speculation about a deal between the Liberal Democrats and Komeito was premature, although he conceded that the plan was under "very serious consideration." Saiki said that there were numerous logistical and practical question marks hanging over the gift-certificate plan and that although a political agreement to support the plan might be reached, it might prove to be impossible to put into effect. In addition to "making nice" to Komeito, the Liberal Democrats have been seeking to repair relations with Ichiro Ozawa, a former party member who leads the opposition Liberal Party. Ozawa's career seemed over last year, when the opposition party he had previously led disbanded in a flurry of name-calling and acrimony. But he now finds himself in the catbird seat, being wooed most assiduously by senior Liberal Democrats, including the powerful chief cabinet secretary, Hiromi Nonaka. Nonaka recently met with senior Liberal Party members and announced that he had "started to feel that we have the same hometown and the same viewpoint." The gift certificates would be part of a $169 billion package, the second this fiscal year. Komeito says that the previous plan proved useless in provoking increased spending despite $34 billion in tax cuts because taxpayers merely put away the additional money. Komeito has suggested that each certificate have a value of $254. Economists have estimated that if the consumers spent the certificates as they are supposed to, it would give an increase to the economy of less than 1 percent. The Finance Ministry, which strongly opposes the Komeito proposal, contends that consumers can also pocket the value of the gift certificates by using them to buy things like food and putting the cash that they would have otherwise spent into savings. "We cannot measure or foresee the effect of this voucher," an official in the ministry's budget bureau said Wednesday. "People will use this voucher. But it's not at all clear whether it will lead to more spending." The ministry has also raised questions about the potential for forgery, who will receive the certificates, where they can be spent and how much the program would cost. The government would have to pay for printing, distribution and redemption at the very least, the budget official said. "If it can only be used in a limited number or category of shops, then it raises constitutional issues of the violation of equality," he said. "But if it can be used for anything any place, then it becomes just like money and has no significance."