DPJ presses central bank to take swift action over yen`s rise

TOKYO, Aug. 26 Kyodo -
The Democratic Party of Japan released a set of proposals on Thursday for fresh
fiscal stimulus to boost consumer and business spending, with the ruling
party's policy chief urging the Bank of Japan to swiftly address the recent
sharp rise of the yen and the country's deflation.
''The biggest problems we face are the stronger yen and deflation,'' Koichiro
Gemba, who doubles as state minister for civil service reform, told reporters.
''We want to request the BOJ to make a rapid and in-depth response.''
The comments, which came after Gemba met with Prime Minister Naoto Kan and
other Cabinet members, added to the evidence that lawmakers have been turning
up the heat on the central bank to further ease its monetary policy when its
Policy Board meets next month.
Kan said the ministers will meet again Friday to exchange opinions regarding
the envisioned stimulus package.
''We will accelerate our work,'' he told reporters.
It is uncertain, however, whether the government will be able to quickly
implement measures to counter the economic hardship amid confusion within the
ruling party in the run-up to its presidential election.
DPJ heavyweight Ichiro Ozawa said Thursday he will run against current party
president Kan in the Sept. 14 election, a move that could possibly burden the
country with its third prime minister in a year.
Kan is planning to outline new stimulus measures this month and instruct
ministers to compile specific policies, government officials said.
The DPJ proposed expanding some government subsidy programs to encourage
consumer spending, including the ''eco-point'' incentive program for the
purchase of energy-efficient home appliances, which is set to expire in
December.
Promoting the use of renewable energy with financial support and deregulation,
and improving employment conditions for new graduates and women bringing up
children were also among the party's proposals.
In order to enhance corporate capital spending, the DPJ said the government
should consider measures such as tax breaks for companies investing in
environmentally friendly technologies and financial support for smaller
businesses facing difficulty borrowing from banks.
The government is expected to secure necessary funds for the stimulus steps
from a reserve fund of around 920 billion yen in the fiscal 2010 budget and an
800 billion yen surplus from the fiscal 2009 budget.
Gemba also said the government should first move quickly by using the reserve
fund, which can be allocated without Diet deliberations, and that ''if
necessary'' it should consider compiling a supplementary budget.
Chief Cabinet Secretary Yoshito Sengoku told reporters earlier in the day, ''I
hope we can proceed (with the stimulus) as soon as possible after the party's
policy council sets out its requests.''
The government had initially planned to outline fresh fiscal stimulus steps in
early September. But Kan has decided to accelerate the process, given growing
calls from business leaders for the government to take immediate action to ease
the adverse impact on corporate earnings from the strong yen, which makes
Japanese exports less competitive, and subsequent share price falls.
The Cabinet members who met at the prime minister's office included Kan, Gemba,
Finance Minister Yoshihiko Noda and Satoshi Arai, state minister for economic
and fiscal policy.
==Kyodo