Japan planning expansion of public body's share purchases+

TOKYO, Feb. 26 Kyodo - Japan's governing Liberal Democratic Party and its junior coalition partner New
Komeito party are studying the expansion of share purchases by a public entity
and other new measures to support the slumping stock market, coalition sources
said Wednesday.

The Banks' Shareholdings Purchase Corp., a public entity founded in 2002, is
set to resume purchasing shares subjected to crossholdings between banks and
their customer corporations under a bill that is planned to pass the Diet early
next month.
The sources said the ruling coalition and government are planning to attach to
the bill a resolution calling for expanding the range of shares for purchase by
the corporation and submit a bill for the expansion promptly.
The two parties agreed on the need for new measures to boost stock prices
during a meeting of senior party officials earlier in the day.
''We will have the pending bills passed into laws quickly,'' LDP Secretary
General Hiroyuki Hosoda told reporters after reaching the agreement with his
New Komeito counterpart Kazuo Kitagawa. ''Further financial and stock market
measures should be taken. We will draft bills if necessary.''
The corporation is planning to use a 20 trillion yen credit guarantee facility
put into the second supplementary budget for fiscal 2008 enacted earlier.
The range of shares for purchase by the corporation may be expanded to cover
all shares and even exchange-traded funds, the coalition sources said.
The ruling parties' accord on new stock market measures came after the key
Nikkei stock index briefly fell below a 26-year closing low Tuesday. Finance
Minister Kaoru Yosano said the same day the government would consider taking
measures to stem the faltering stock prices.
Fujio Mitarai, chairman of the Japan Business Federation, the nation's largest
business lobby, has proposed to create a public organization to purchase
stocks.
==Kyodo