Japan should set up a sovereign-wealth fund to fight the high yen, and sell as many government assets as possible to reduce reliance on tax increases to fund quake reconstruction, the ruling party's policy chief said Wednesday.
"We would like to consider a national fund, or a so-called sovereign-wealth fund," Seiji Maehara said in an interview, adding that Prime Minister Yoshihiko Noda said he would examine the idea.
Japan has the world's second-largest foreign reserves after China, totaling some $1.2 trillion. But because 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.Some lawmakers in the past have urged a sovereign-wealth fund, but there has been reluctance to embrace the idea because of the risks in investing globally. Mr. Maehara plays a key role in formulating government policy; his approval as the ruling-party policy chief is required before any bills or budget proposals are decided by the cabinet.
The 49-year-old Mr. Maehara, 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. JT's share price rose Wednesday on news of the planned sales, surging as much as 9.2%—its highest level in nearly three years—before ending down 2.9% on profit-taking. Inpex ended the day up 0.4%, after being up as much as 3.8% intraday.
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—the world's third-largest tobacco company by sales volume—and Inpex. But the timetable for the sales hadn't been clear.
Mr. Maehara also said 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 for the sale 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 package.
wsj
"We would like to consider a national fund, or a so-called sovereign-wealth fund," Seiji Maehara said in an interview, adding that Prime Minister Yoshihiko Noda said he would examine the idea.
Japan has the world's second-largest foreign reserves after China, totaling some $1.2 trillion. But because 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.Some lawmakers in the past have urged a sovereign-wealth fund, but there has been reluctance to embrace the idea because of the risks in investing globally. Mr. Maehara plays a key role in formulating government policy; his approval as the ruling-party policy chief is required before any bills or budget proposals are decided by the cabinet.
The 49-year-old Mr. Maehara, 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. JT's share price rose Wednesday on news of the planned sales, surging as much as 9.2%—its highest level in nearly three years—before ending down 2.9% on profit-taking. Inpex ended the day up 0.4%, after being up as much as 3.8% intraday.
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—the world's third-largest tobacco company by sales volume—and Inpex. But the timetable for the sales hadn't been clear.
Mr. Maehara also said 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 for the sale 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 package.
wsj
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