Economic Policies of Kan, Ozawa Draw Investor Attention

Tokyo, Sept. 4 (Jiji Press)--Ahead of the ruling Democratic Party
of Japan's leadership election on Sept. 14, some stocks attract attention on
expectations of economic policies of the candidates, Naoto Kan, prime
minister and current DPJ president, and Ichiro Ozawa.
In an overall wait-and-see mood on the stock market over the DPJ
presidential election, trading in shares of some construction and real
estate companies grew after the candidacy was announced by Ozawa, former DPJ
secretary-general who is believed to be positive about fiscal spending.
General contractor Fukuda Corp. <1899>, whose founding family is
Ozawa's relatives, became the fifth most active issue on the Tokyo Stock
Exchange's first section by volume on Friday with a turnover of 25.12
million shares. Bridge construction firm Japan Bridge Corp. <5912> also
attracted strong buying interest.
An official at a major securities firm, however, said that
investors tend to trade in small-cap issues when the overall market lacks a
clear direction, indicating that hunting Fukuda and Japan Bridge appears to
have been speculative.
Stock market players expect Ozawa would implement a vigorous
economic stimulus program as he has called for spending 2 trillion yen on
coping with the yen's appreciation and buoying the economy.
Kan insists that he puts priority on boosting employment, but an
official of a second-tier securities firm said economic growth is needed for
employment expansion and that his specific economic policies are uncertain.
Kan has sought 920 billion yen for measures for economic and currency
measures.
The birth of the Ozawa government would push up Japan's real gross
domestic product growth rate by some 0.3 percentage point, said Takahide
Kiuchi of Nomura Securities Co.'s Financial & Economic Research Center.
Kiuchi at the same time said that for stocks to rise, no major
fiscal deterioration should be allowed. Issuing deficit-covering bonds under
loosened fiscal discipline and resultant rises in long-term interest rates
would increase the risk of the yen's further ascent, he said.
Whether the Ozawa government would last long is uncertain, Hidenori
Suezawa of Nikko Cordial Securities Inc. said, and any quick collapse of his
administration would push down stock prices.
Even if Ozawa wins the DPJ race, it would be difficult to assess an
impact on the stock market before he starts working as prime minister, an
official at a major brokerage house said.


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