New Japanese minister calls for loan moratorium of up to 3 years...

Discussion in 'Wall St. News' started by ASusilovic, Sep 18, 2009.

  1. Concerns raised over new Japan ministers
    5:03a ET September 17, 2009 (MarketWatch)
    TOKYO (MarketWatch) -- As the new Japanese government began its first full day in power Thursday, analysts were already pointing out missteps and warning of possible pitfalls -- particularly with the selection of Shizuka Kamei as postal and banking minister.

    Investors were initially upbeat as parliament met to install Democratic Party of Japan leader Yukio Hatoyama as prime minister Wednesday. See full story on market reaction to new government.

    But several newly-appointed Cabinet members immediately uttered remarks that some analysts say raised red flags.

    "Two of his senior ministers wasted no time piping up with statements producing immediate negative economic consequences," said Cantor Fitzgerald economist Uwe Parpart in emailed comments Thursday.

    Kamei said he will seek to help small companies by allowing them to take a three-year moratorium on loan payments, telling reporters, "Japan's situation now is like a body in which blood isn't flowing to all the parts."

    At a news conference Thursday morning, Kamei said he intended to submit a bill on the loan extensions to an extraordinary session of parliament next month.

    But Parpart said such a loan moratorium "may have longer-term negative consequences for the banking sector."

    Moreover, Kamei -- who quit the former ruling Liberal Democratic Party in 2005 to head a tiny opposition party -- is strongly against the privatization of Japan Post, "so he is highly likely to work on cancellation/revision of the postal reform," said Tomoko Fujii, a rates and currency strategist at Bank of America Securities-Merrill Lynch Japan.

    "Thus, some of the Hatoyama administration's policy initiatives suggest a retreat from structural reforms, which are critical to global investors' interests in Japanese assets," she said in a research note. "While short-term investors may remain positive toward the Japanese yen, global equity investors are not likely to boost their investment in Japan."

    Japan Post had initially planned to list itself and two of its units -- Japan Post Bank Co. and Japan Post Insurance Co. -- as early as the fiscal year beginning in March 2010. It is mandated to release all shares in the two subsidiaries by September 2017, with the government to keep an equity stake of at least one-third after the listing.

    Japan Post also provides financial services, including banking services. It had a massive 178.2 trillion yen ($1.95 trillion) in customer deposits as of June 30, according to its Web site.

    Kamei's appointment raised some domestic concerns as well. NIPPON EXPRESS Co. is deeply concerned that Kamei's appointment as minister could derail a merger plan seen as key to its survival in the parcel-delivery business, the Nikkei business daily reported Thursday.

    Nice start...
  2. 4XQs


    There was some nice comments a few days ago about preferring a strong JPY as well, retracted/moderated today of course :)
  3. The Japanese are "good" with double-talk. :cool: