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Friday, Feb. 27, 2009

Yosano stays silent on stimulus, tax cut rumors

Staff writer

Striking a fine balance between economic countermeasures and long-term fiscal reconstruction should be a key government goal, newly appointed Finance Minister Kaoru Yosano said Thursday.

News photo
Finance Minister Kaoru Yosano SATOKO KAWASAKI PHOTO

"We have not abandoned fiscal reconstruction," Yosano said in a joint interview with The Japan Times and other media organizations. "Both (economic stimulus and fiscal reconstruction) have to be compatible."

Yosano has long been known as an advocate of fiscal austerity and tax hikes for rebuilding the nation's deficit-ridden finances. But he emphasized that maintaining both goals at once should be Japan's priority.

Yosano, who is doing triple duty as the financial services and economic policy ministers, said he is not considering a new round of economic stimulus yet because the budget bills for 2009 haven't even cleared the Diet.

He refused to discuss the possibility that sales and income tax cuts would be used to stimulate domestic demand.

"We will have to consider such an option once the budget deliberations are over and the related bills are passed," he said. "I cannot say anything at this moment."

Meanwhile, Yosano brushed aside media reports that said he is the front-runner to replace unpopular Prime Minister Taro Aso.

Yosano was given the finance minister post last week when Shoichi Nakagawa abruptly resigned after appearing to be drunk at a Group of Seven press briefing in Rome.

Some reports have praised Yosano's handling of political deliberations, and members of the opposition also say they respect his ability.

Yosano ran for president of the ruling Liberal Democratic Party last year but ended a distant second to Aso. This time, however, Yosano denies harboring any ambition of being his party's leader and prime minister.

"I have never even thought about that," Yosano said. "Please do not play up that topic because I'm now solely concentrating on my jobs."

No one is likely to argue with him. The woes of the Tokyo stock market are causing renewed concern that banks are under pressure from increasing losses.

Yosano said the government is standing by to recapitalize banks to maintain orderly cash flow to companies in need of funds, if any bank so requests it.

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The Japan Times

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