Gov't may seek additional steps to stem diving share prices+

TOKYO, March 9 Kyodo - Japan should take additional measures to turn around diving share prices in response to the day's plunge of the key Nikkei index to its lowest closing level in more than 26 years, the government's top spokesman indicated Monday.

''I have a feeling that maybe the government should devise more powerful
measures to prevent share prices from dealing a blow to companies' financial
results for the 2008 business year (ending March 31),'' Chief Cabinet Secretary
Takeo Kawamura told a news conference.
Prime Minister Taro Aso denied the possibility that the government would
directly intervene to lift stock prices, but told reporters that his Cabinet
will closely monitor market movements.
Vice Finance Minister Kazuyuki Sugimoto said at a separate press conference
that the government has been considering measures to boost stock prices and
avert an economic freefall.
Earlier in the day, the 225-issue Nikkei Stock Average shed 1.21 percent to
close at 7,086.03, its lowest finish since Oct. 6, 1982.
Last Wednesday, the Japanese parliament passed a bill to allow a public entity
to resume purchasing shares held by banks to help prevent a decline in the
stock market.
The Banks' Shareholdings Purchase Corp., a public entity founded in 2002, said
it will resume purchasing such shares in mid-March under the government's 20
trillion yen credit guarantee facility until the end of March 2012.
Business leaders and lawmakers have been calling for an expansion of the
existing stock purchase scheme and additional measures to lift sagging share
prices.
Fujio Mitarai, chairman of the powerful Japan Business Federation, on Monday
warned against a ''vicious cycle,'' noting that falling stock prices have
resulted in a cutback in bank loans and could increase bankruptcies.
The federation, known as Nippon Keidanren, proposed the same day that a public
entity, such as the share purchase body, should purchase exchange-traded funds
tracking the Tokyo Stock Exchange Stock Price Index.
The entity should issue government-guaranteed bonds convertible into ETF
shares, enabling buyers of the bonds to earn profits on rises in ETF prices
while avoiding losses from stock price falls, the federation said.
It also called on the government to work out an additional stimulus package as
part of a supplementary budget for fiscal 2009, including measures to encourage
consumers to buy environmentally friendly electric motor vehicles and
energy-saving home appliances.
==Kyodo
2009-03-09 21:40:04