Slices of Japanese business, politics and life
Government stock rescue?
Japanese stocks are sinking towards levels unseen since 1982, sending alarmed government officials scurrying to come up with some way of propping them up.
That slices into the value of huge share portfolios held by Japanese banks and erodes their capital just when the economy needs them to boost lending.
Among proposals being considered is setting up a stock-buying agency as Japan did in the mid-1960s, which follows another plan for the government to buy up to 20 trillion yen in shares from banks — a plan currently stalled in parliament.
The latest suggestion, in a newspaper on Thursday, is for the Bank of Japan to be pushed into buying stock exchange-traded funds.
Though market players say stock buying by government agencies might help a little, most remain wary with the Japanese market slide part of a global criiss.
“These stock plans may buy a bit of time, but without enacting a decisive economic stimulus package simultaneously they won’t be really effective,” Takahiko Murai, general manager of equities at Nozomi Securities, told me.
Others are harsher, noting the dire economic state and paralysis in a divided parliament under unpopular Prime Minister Taro Aso, with an increasingly strong opposition determined to delay policy as it eyes an election soon.
“We don’t need more money,” said one fund manager. “We need a change of leadership.”
The Nikkei gave all the proposals a cold shoulder and edged down on Thursday, bringing its losses — after the worst post-War decline ever last year – for calendar 2009 to more than 15 percent, on top of a record 42 percent slide last year.
Photo credits: Kim Kyung Hoon