The vice finance minister said Thursday that Japan’s real economy is firming, although it is currently being weighed down by geopolitical concerns.
“My understanding is that there are signs that the real economy is firming,” Vice Finance Minister Masakazu Hayashi said. “There are some good data, including the machinery order figures announced yesterday.”
Japan’s core private-sector machinery orders rose a seasonally adjusted 7 percent in January over December for the second consecutive monthly expansion.
On the recent stock plunge, Hayashi said: “I think that basically geopolitical risks are behind the current situation.”
‘Policy must change’
The recent falls in Tokyo share prices are attributable to investors’ geopolitical concerns, but Japan must change its economic policy if it wants to reverse the trend, renowned equity strategist Peter Tasker said Thursday.
“There is no way you can just change that big picture without changing the whole direction of economic policy . . . to make people think that things are getting better,” Tasker said in reference to recent 20-year lows in share prices.
Tasker, consultant strategist to Dresdner Kleinwort Wasserstein (Japan) Ltd., said there is no policy debate among politicians, bureaucrats and others to help shore up the economy. He added that Japan has the resources to deal with its plight.
The government should try to increase money supply, cut taxes and take over banks’ bad loans, Tasker said.
“It’s a mental issue where they have taught themselves into believing that they don’t have any money,” he said at the Foreign Correspondents’ Club of Japan in Tokyo.
Tasker also criticized the government’s expected package of measures to prop up sagging share prices, saying they are just as manipulative as previous steps. The measures are expected to relax restrictions on listed companies’ purchases of their own shares and strengthen curbs on short sales.
Tasker said stocks are falling due to concerns over the global economy and tensions surrounding Iraq and North Korea.
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