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Japan's plan to revive economy

Friday 24 July 1992 18:02 EDT
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TOKYO (AFP) - The Japanese government and ruling party were reported to have agreed at an emergency meeting yesterday to adopt additional fiscal measures to revive the economy.

The agreement came during a 90-minute meeting chaired by the prime minister, Kiichi Miyazawa, to discuss the malaise of the Japanese stock market.

The finance minister, Tsutomu Hata, was quoted by Kyodo news service as saying that a 'stimulative package' would be worked out in the middle of September.

The agency also reported that Mr Hata unsuccessfully urged the Japanese life insurance industry at a meeting last week to resume buying stocks in an effort to prop up the sagging market.

The late-night meeting of senior cabinet ministers and members of the ruling Liberal Democratic Party was called by Mr Miyazawa during a campaign tour of western Japan on Thursday as stock prices slid to yet another six-year low.

Although prices rebounded on the announcement, the recovery proved short-lived with the Nikkei stock average retreating 3.4 per cent again yesterday.

Those attending the meeting included the international trade and industry minister, Kozo Watanabe, the economic planning agency director-general, Takeshi Noda, and the chief cabinet secretary, Koichi Kato.

Poor corporate earnings remain the primary concern of Japanese investors. Another more immediate factor is political uncertainty ahead of Upper House elections tomorrow.

Many analysts think the timing of the meeting may have more to do with political considerations than a resolve to implement market-boosting measures.

'The Nikkei's plunge reflects the cynicism of investors about the government's motives,' a broker said.

(Graph omitted)

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