TOKYO—Japan should consider setting up a sovereign-wealth fund to both take advantage of the strong yen and try to push down the currency, Seiji Maehara, policy chief of the ruling Democratic Party of Japan said Wednesday.
"We need to think of ways to convert the yen into foreign currencies, and I've told the prime minister we should consider it," Mr. Maehara said in an interview, adding that Prime Minister Yoshihiko Noda said he would look at such a move.
Japan has the world's second-largest foreign reserves after China, totaling some $1.2 trillion. But since they are held in foreign currencies, Mr. Maehara said, a sovereign wealth fund that would buy foreign assets by selling the yen is needed to stem the yen's strength.
Mr. Maehara plays a key role in formulating government policy, since his approval as the ruling party policy chief is required before any bills or budget proposals are decided by the cabinet. Lawmakers have in the past urged a sovereign wealth fund, but there has been reluctance to embrace the idea due to the risks involved in making investments globally.
The 49-year-old lawmaker, who lost to Mr. Noda in a party election last month to choose the new prime minister, added that the government planned to sell all of its Japan Tobacco Inc. shares within 10 years, and most of its stake in oil-and-gas exploration company Inpex, excluding the "golden share"—the government's controlling share.
The government and the ruling party Tuesday agreed on a ¥12 trillion ($156.23 billion) spending package for quake reconstruction that would be funded mainly by tax increases and sales of government-held shares, including those of JT. But the timetable for the sales hadn't been clear.
JT's share price rose Wednesday on news of the planned sales, surging as much as 9.2% intraday to its highest level in nearly three years, but it ended down 2.9% on profit-taking. Inpex ended the day up 0.4%, after being up as much as 3.8% intraday.
Mr. Maehara also said that selling government-held shares of Japan Post was an option to further increase nontax revenue for quake reconstruction and lower reliance on taxes.
"It's certainly in sight," he said, adding that the ruling party will try to enact legislation necessary to allow for the sales of government-held Japan Post shares, which total ¥9.6 trillion in book value.
After two days of heated debate among DPJ lawmakers, the government and the ruling party agreed Tuesday to raise ¥7 trillion through nontax revenue and ¥9.2 trillion by tax increases to fund the spending package.
Source: http://online.wsj.com
"We need to think of ways to convert the yen into foreign currencies, and I've told the prime minister we should consider it," Mr. Maehara said in an interview, adding that Prime Minister Yoshihiko Noda said he would look at such a move.
Japan has the world's second-largest foreign reserves after China, totaling some $1.2 trillion. But since they are held in foreign currencies, Mr. Maehara said, a sovereign wealth fund that would buy foreign assets by selling the yen is needed to stem the yen's strength.
Mr. Maehara plays a key role in formulating government policy, since his approval as the ruling party policy chief is required before any bills or budget proposals are decided by the cabinet. Lawmakers have in the past urged a sovereign wealth fund, but there has been reluctance to embrace the idea due to the risks involved in making investments globally.
The 49-year-old lawmaker, who lost to Mr. Noda in a party election last month to choose the new prime minister, added that the government planned to sell all of its Japan Tobacco Inc. shares within 10 years, and most of its stake in oil-and-gas exploration company Inpex, excluding the "golden share"—the government's controlling share.
The government and the ruling party Tuesday agreed on a ¥12 trillion ($156.23 billion) spending package for quake reconstruction that would be funded mainly by tax increases and sales of government-held shares, including those of JT. But the timetable for the sales hadn't been clear.
JT's share price rose Wednesday on news of the planned sales, surging as much as 9.2% intraday to its highest level in nearly three years, but it ended down 2.9% on profit-taking. Inpex ended the day up 0.4%, after being up as much as 3.8% intraday.
Mr. Maehara also said that selling government-held shares of Japan Post was an option to further increase nontax revenue for quake reconstruction and lower reliance on taxes.
"It's certainly in sight," he said, adding that the ruling party will try to enact legislation necessary to allow for the sales of government-held Japan Post shares, which total ¥9.6 trillion in book value.
After two days of heated debate among DPJ lawmakers, the government and the ruling party agreed Tuesday to raise ¥7 trillion through nontax revenue and ¥9.2 trillion by tax increases to fund the spending package.
Source: http://online.wsj.com
No comments:
Post a Comment