Japan authorities hold 8 tril. yen in Fannie, Freddie debt: Ibuki

TOKYO, Sept. 19 Kyodo - Finance Minister Bunmei Ibuki admitted Friday that the Japanese government and the Bank of Japan hold a total of about 8 trillion yen ($74.5 billion) in debt issued by recently rescued U.S. mortgage agencies Fannie Mae and Freddie Mac.

Also Friday, BOJ Governor Masaaki Shirakawa said the central bank will consider
''every possible option'' to get through the current financial crisis and did
not deny the possibility of an interest rate cut as an emergency measure.
Ibuki and Shirakawa revealed the data and made the remarks at a meeting of the
House of Councillors Committee on Financial Affairs also attended by Financial
Services Minister Toshimitsu Motegi.
In answer to a question from an opposition lawmaker regarding the accuracy of
an estimate that the Japanese authorities hold around 8 trillion yen worth of
so-called agency debt issued by Fannie Mae and Freddie Mac, Ibuki declined to
specify an amount on the grounds that he did not want to influence financial
markets but instead replied, ''Your calculation is grounded.''
Last week, the U.S. government announced its bailout plan for the two mortgage
providers in what is widely regarded as an effective nationalization.
The move, aimed at improving the outlook for the U.S. housing and credit
markets which have collapsed due to the subprime mortgage crisis, is expected
to help the holders of agency debt stave off any write-downs.
Shirakawa told the upper house committee meeting, ''As for monetary policy, we
always think about every possible option. That applies not only to the BOJ but
all central banks at any moment.''
''Our decision-making process never takes place with a preordained
conclusion,'' Shirakawa told ruling and opposition lawmakers at the meeting
when asked if the bank could decide to lower borrowing costs as an emergency
policy measure.
His remarks came after the BOJ said Thursday that it will take coordinated
action with five other central banks, including the U.S. Federal Reserve and
the European Central Bank, and will supply dollar funds to the Tokyo money
market in an attempt to improve liquidity, which has been drying up as banks
become increasingly cautious about fresh lending.
Motegi said it will take time for stability to be restored in world markets.
But he added, ''We haven't seen any problem so far that could have a serious
impact'' on Japan's financial system since U.S. brokerage Lehman Brothers
Holdings Inc. filed for bankruptcy protection in New York earlier this week.
Japanese banks and other financial institutions have enough capital, Motegi
said, denying the possibility that upheavals in the United States could bring
about systemic risks in Japan.
==Kyodo
2008-09-19 21:27:33