Posted on: Thursday, March 15, 2001
Japanese government considers buying shares to boost economy
Associated Press
TOKYO — Government officials tried to calm fears of a Japan-led market meltdown today, saying the country's economy is strong. But as a measure of the deepening concern, a Cabinet-level task force was convened to seek ways to boost the plunging stock prices here.
Prime Minister Yoshiro Mori, who heads the task force, said before its first meeting today that the government will consider measures to bolster the market, including efforts to stimulate lagging consumer spending. During the roughly two-hour meeting, Mori and his top economic advisers also discussed whether the government should buy shares from banks and other companies selling stocks ahead of the end of the fiscal year on March 31, according to Mori spokesman Kazuhiko Koshikawa. In its morning session today, the market hit a new 16-year low and generated intense concern both in Tokyo and around the world. It recovered slightly after noon. Mori acknowledged that a much-hoped-for recovery from this nation's worst downturn since World War II is pausing, and he said one of the reasons is an economic slowdown in the United States. The Cabinet task force will discuss an economic stimulus package submitted by the ruling coalition last week. The package recommended addressing the bad loan problem at banks and revitalizing businesses. But that has done little to ease concerns, either, because Mori and his Cabinet are expected to be forced to resign soon. It remains unclear who might replace him, and when. The international ratings agency Fitch announced yesterday that it was putting Japanese banks, which are major market shareholders, on negative review over growing worries about the impact of sliding share prices on their business.
