News Economic plan unveiled; investors, analysts see little to be excited about

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The government's Council on Economic and Fiscal Policy, chaired by Prime Minister Junichiro Koizumi, unveiled on Feb. 27 a long-awaited plan aimed at fighting deflation and reviving the economy.

Economy Minister Heizo Takenaka said the anti-deflation package targets major obstacles blocking recovery: wiping out bad debt, shoring up the stock market, boosting credit to small businesses and encouraging consumer spending.

Takenaka said the plan also authorizes the government's loan-buying agency to speed its bad loan purchases from banks.

To bolster Japan's sinking stocks, the plan promises stricter regulations on short-selling. Short-selling involves selling borrowed stock in a bet that the shares can be repurchased later at a lower price.

But the plan drew mostly scorn from analysts and investors, many of whom dismissed it as a vague restatement of current policies.

One analyst noted that Koizumi "has lost his nerve for making big decisions, or he never really intended to."

"Our view is that there is nothing new here," another analyst remarked.

Meanwhile, on Feb. 28, the Bank of Japan took a new step to ease its already ultra-loose monetary policy with an increase in its outright purchases of government bonds

政府、金融のデフレ対策決定

政府の経済財政諮問会議は2月27日、緊急に取り組むデフレ対策をまとめた。企業決算期の3月末に向け金融不安を回避するためのものだが、新味がないと批判も多い。

Shukan ST: March 8, 2002

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