Efforts at fiscal reform might have slowed down, but the government's basic goal of fiscal reconsolidation must not be abandoned, Finance Minister Hikaru Matsunaga said during a new conference Wednesday.

Matsunaga added that he would like to further examine the rough draft of an economic stimulus plan drawn up by the ruling Liberal Democratic Party and its two non-Cabinet allies last week. "The outline says the parties would uphold the spirit of the Fiscal Structural Reform Law, and that must be taken very seriously," he said.

At the same time, he pointed to the fact that even under the constraints of the austerity law the government could still issue nearly 1.4 trillion yen worth of deficit-covering bonds in fiscal 1998. But he denied that his comment meant the government is prepared to issue the bonds as part of a supplementary budget, since the actual fiscal 1998 budget is still being debated in the Diet.

Calls are mounting within the LDP to revise the law to make room for more fiscal pump-priming measures such as large-scale income tax cuts to boost domestic demand.

Regarding the various financial deregulation measures that went into effect the same day, Matsunaga issued a statement saying steps such as the easing of the Foreign Exchange and Foreign Trade Control Law will offer a wider range of financial products to the consumer and more business opportunities for firms. "On the other hand, companies and individuals must also be well aware of the risks and act according to the principle of self-responsibility," he said, adding that financial liberalization efforts will also bring an end to the Finance Ministry's so-called convoy system of industry regulation.