• Kyodo

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LDP Secretary General Taku Yamasaki expressed support Monday for compiling a second antideflation package, including tax cuts, to prop up the economy.

“We need to move actively regarding a second package of antideflation measures,” Yamasaki told reporters, referring to the outcome of a meeting earlier in the day of top White House economic adviser Lawrence Lindsey and the secretaries general of Japan’s three ruling parties. “The ruling parties will promote discussions to determine the content.”

Yamasaki indicated that the means of financing tax cuts will be the focal point of the coalition’s talks.

The first antideflation package, announced Feb. 27, was criticized for lacking concrete measures. It included a call for the Bank of Japan to work more closely with the government, a call for the BOJ to adopt a bolder monetary policy and a call for the BOJ to ensure that the banking system is awash with cash.

It also promised that major banks would be pressured to get their insolvent debtors to draft restructuring plans and that the government would take “all necessary steps” if a financial crisis loomed.

The most effective part of the package was the tightening of rules regarding short selling, which helped stoke prices on the Tokyo Stock Exchange but did little for those in grocery stores.

Yamasaki is visiting Washington with Tetsuzo Fuyushiba of New Komeito and Toshihiro Nikai of the New Conservative Party.

In Washington on April 19, Finance Minister Masajuro Shiokawa promised Treasury Secretary Paul O’Neill that Japan would compile in June a package of economic measures, including tax reform.

O’Neill expressed hope for the efforts and urged Japan to achieve annual economic growth of 2 percent to 3 percent to help the global economy recover.

Shiokawa made the same pledge two weeks ago at a meeting of Group of Seven finance ministers and central bank governors in Washington, as Japan was seen as the G7 laggard in efforts to spur the global economy.

The G7 nations comprise Britain, Canada, France, Germany, Italy, Japan and the U.S.

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