Finance Minister Hikaru Matsunaga denied Monday that he had made any commitment to the Group of Seven nations to implement additional economic stimulus measures, such as an extra budget for fiscal 1998.
Speaking at a news conference after his return from a meeting of the G-7 finance ministers and central bankers in London on Saturday, Matsunaga said he had explained to the participants the steps Japan has so far taken to revive its economy.
These include 2 trillion yen worth of income and resident tax cuts, and a plan aimed at restoring confidence in the banking sector through the utilization of 30 trillion yen in public funds. "I believe these steps were rated highly, and I also explained that we will now make every effort to secure Diet passage of the fiscal 1998 budget as swiftly as possible," Matsunaga said.
But he stressed he had made no promise to take further steps to nurse the economy back to health. Saturday's G-7 communique had referred to the Japanese economy as "weak."
The government is in a predicament as it faces increasing international pressure to quickly use fiscal means such as greater tax cuts to help the situation.
This action would require a supplementary budget, but if Tokyo agrees to such steps before the fiscal 1998 budget clears the Diet, it could lead to calls from the opposition camp to revise the initial budget -- something Prime Minister Ryutaro Hashimoto wants to avoid.