“We don’t believe the effect of the stimulus will fade,” Yosano said.

TO BE NOTED: From Bloomberg:

"Yosano Says Japan’s Trust in Treasuries ‘Unshakable’ (Update1)

By Keiko Ujikane and Takashi Hirokawa

June 12 (Bloomberg) -- Japanese Finance Minister Kaoru Yosano said his government is confident about the outlook for U.S. Treasuries, signaling the second-biggest foreign holder of the securities will keep buying them amid record sales.

“We have complete trust in the fact that the U.S. views its strong-dollar policy as fundamental,” Yosano, 70, said in an interview in Tokyo on June 10 before attending a Group of Eight meeting of finance ministers starting today in Italy. “So our trust in U.S. Treasuries is absolutely unshakable.”

The U.S. government has come under fire from some creditors as spending to prop up its economy is projected to quadruple its budget deficit to $1.85 trillion in the year ending Sept. 30. China and Russia, the largest and third-largest single holders of the debt, have said they may reduce their reliance on dollar- denominated assets, fueling a surge in Treasury yields to a seven-month high.

“Japan is, of course, mindful that selling Treasuries will cause the yen to strengthen and that would hurt corporate profits,” said Chotaro Morita, chief strategist in Tokyo at Barclays Capital Japan Ltd. in Tokyo. “Even with their strong ties, it’s possible Japan would consider selling U.S. Treasuries should the dollar say, halve in value.”

Yields Jump

Ten-year Treasury yields fell two basis points to 3.83 percent after Yosano’s remarks and have jumped from a record low of 2.04 percent in December. They advanced to their highest since Oct. 16 this week after Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said on June 10 his country may switch some of its Treasury holdings to International Monetary Fund bonds.

China Premier Wen Jiabao called in March for the U.S. “to guarantee the safety of China’s assets” and central bank Governor Zhou Xiaochuan has proposed a new global currency to reduce reliance on the dollar.

“We have complete faith in U.S. economic and fiscal policy,” said Yosano, who is also the minister in charge of Japan’s banking sector and economic policy. “The U.S. dollar’s position as the world’s reserve currency isn’t under threat.”

U.S. President Barack Obama has tried to assuage investor concern by pledging to cut the shortfall in half by the end of his first term. Obama may borrow a record $3.25 trillion this fiscal year, almost four times last year’s amount, according to Goldman Sachs Group Inc.

Strong U.S. Currency

A strong U.S. currency benefits Japan by increasing corporate profits in yen terms and preserving the competitiveness of exports. A collapse in global demand and the yen’s 8.5 percent advance against the dollar since September caused earnings to tumble a record 69 percent last quarter.

Japanese investors are the biggest foreign holders of Treasuries after China with $686.7 billion of the securities in March, according to the Treasury Department. To reduce Japan’s investment risk, some lawmakers have argued the U.S. should sell yen-denominated debt, an idea Yosano said the government wouldn’t pursue.

“We have no intention of asking for that,” Yosano said. “It’s up to the U.S. to decide whether to issue dollar- denominated bonds or samurai yen-denominated bonds.”

Masaharu Nakagawa, finance spokesman of the opposition Democratic Party of Japan, said last month the government should ask the U.S. to sell debt denominated in yen, so-called samurai bonds, over his concern that the dollar may weaken.

Poets in Family

Yosano, a cancer survivor who became a lawmaker in 1976, is the grandson of Tekkan and Akiko Yosano, poets whose work is taught to school children. The son of a diplomat, Yosano is fluent in English and studied in Cairo for three years when he was a teenager. He graduated with a law degree from Tokyo University in 1963.

Under Yosano’s stewardship, Japan in April unveiled a record 15.4 trillion yen ($158 billion) stimulus package to pull the nation out of its deepest postwar recession. The minister said new measures may not be needed because packages announced since last year have already started to support the economy.

“We don’t believe the effect of the stimulus will fade,” Yosano said.

In the long term, Japan will need to reduce its reliance on exports and foster spending at home to sustain growth, he said.

“Ceaseless efforts are needed to create new technology and products,” Yosano said. “We need to increase domestic demand to invigorate the economy and make a significant contribution to global growth.”

To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

Asian nations will set up a $120 billion foreign-currency reserve pool by year-end

TO BE NOTED: From Bloomberg:

"Asia’s $120 Billion Reserve Fund to Boost Investor Confidence

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By Shamim Adam and Jason Clenfield

May 4 (Bloomberg) -- Asian nations will set up a $120 billion foreign-currency reserve pool by year-end to help revive investor confidence as economies around the region falter amid the worst global recession since World War II.

The Association of Southeast Asian Nations, together with Japan, China and South Korea, will use the funds in times of turmoil. They will set up a surveillance unit that will identify risks to the region and provide oversight of the fund. Japan also offered $60 billion of yen-denominated swap facilities.

“It’s not so much the amounts of money being put in, but the concept of these countries getting together and cooperating,” Mark Mobius, who helps oversee $20 billion in emerging-market assets at Templeton Asset Management Ltd., said in an interview yesterday in Bali, Indonesia. “That’s a very positive development.”

The fund, known as the Chiang Mai Initiative, widens access to foreign-exchange reserves allowing nations such as Indonesia and Thailand, recipients of International Monetary Fund bailouts a decade ago, to defend their currencies. The 13 nations have accumulated more than $3.6 trillion of currency reserves since, with China owning more than half of the assets.

“The idea is for the Asean plus three countries to effectively look after ourselves with our own reserves,” Thai Finance Minister Korn Chatikavanij said yesterday in Bali, where the officials met.

$100 Billion Loans

The IMF arranged more than $100 billion of loans to Thailand, Indonesia and South Korea after their currencies collapsed during the 1997-1998 crisis. In return, governments were forced to cut spending, raise interest rates and sell state-owned companies.

In Thailand, former Prime Minister Thaksin Shinawatra asked his countrymen to fly the national flag on offices, homes and factories after making the last payment in 2003 of the $12.3 billion it drew. Indonesia repaid its debt in 2006, four years before schedule.

Following yesterday’s agreement, Japan will contribute $38.4 billion to the fund, while China and Hong Kong together will add another $38.4 billion to the pool. South Korea’s contribution will be $19.2 billion.

The Southeast Asian nations will contribute 20 percent of the total amount. Thailand, Indonesia, Malaysia and Singapore, the four biggest Southeast Asian economies, will contribute $4.77 billion each, and the Philippines will provide $3.68 billion.

Surveillance System

Under the Chiang Mai Initiative, Asian nations can borrow, without restrictions, 20 percent of an agreed swap amount. They can tap the 80 percent balance only after agreeing to IMF-style restrictions.

That may change as the surveillance system is developed, Korn said. The IMF, Asian Development Bank and the Asean Secretariat will be tapped initially for their expertise in such matters, finance ministers said.

“We feel that we ought to also develop a surveillance system and manage it ourselves as opposed to needing to rely on the surveillance system of institutions outside the region,” Korn said. “The idea is that as we increase our surveillance capacity, the de-linked portion increases.”

Nine of the region’s 10 currencies tracked by Bloomberg fell against the U.S. dollar in the first three months of the year. This quarter, eight have gained against their U.S. counterpart.

‘Real Traction’

“One of the beneficiaries of this crisis, if you want to call it that, has been the way it speeded up the regional market development,” said Gerard Lyons, London-based chief economist at Standard Chartered Bank, said in an interview in Bali. “The Chiang Mai Initiative has now started to get real traction.”

Countries such as Japan and China are doing more to help others navigate through the crisis. China last month announced plans to create a $10 billion investment cooperation fund and offer $15 billion in credit to its Southeast Asian neighbors.

Japan’s Finance Minister Kaoru Yosano yesterday said the country will offer $60 billion of yen-denominated swap facilities to help nations during a financial crisis. Asia’s biggest economy will also guarantee up to 500 billion yen ($5 billion) of yen-denominated bonds, or Samurai bonds, issued in Japanese markets by developing countries, he said.

“The entire world was hit by the crisis and it can only be addressed through international cooperation,” Yosano said. Cooperation is “the resource we achieved in the meeting.”

Aso, 68, said the government will consider raising the consumption tax from the current 5 percent once the economy recovers

TO BE NOTED: From Bloomberg:

"Aso’s Stimulus Plan May Spur Economy at ‘Massive’ Future Cost

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By Keiko Ujikane and Toru Fujioka

April 11 (Bloomberg) -- Japan’s record 15.4 trillion ($153 billion) stimulus package may give a short-term boost to the nation’s economy, while leaving it saddled with a debt burden that will smother future growth, economists said.

The plan unveiled yesterday by Prime Minister Taro Aso, who faces elections this year, is aimed at creating jobs in an economy heading for the worst recession since 1945. Equal to 3 percent of gross domestic product, the measures will add to debt that the OECD already forecasts will rise to 197 percent of gross domestic product next year.

“The stimulus will probably prevent Japan from falling apart in the short term, but it will leave a massive bill for the future,” said Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo. “The package doesn’t do anything to promote a sustainable economic recovery.”

The plan does little to address the nation’s liabilities, give its aging citizens confidence in their pension system, or encourage them to spend some of their 1,400 trillion yen in financial assets, according to Kirby Daley, senior strategist at Newedge Group in Hong Kong.

“The fiscal situation of the government is deteriorating faster than anyone imagined,” Daley said in an interview with Bloomberg Television. The government needs to address its debt “so the Japanese consumer feels comfortable that their pension system is viable. They will then start to unlock those savings,” he said.

Financing Package

Finance Minister Kaoru Yosano said the government will sell more than 10 trillion yen of debt to fund the spending on top of 33.3 trillion yen of bonds to be issued this fiscal year. That would take total liabilities to more than 800 trillion yen by March 2010, excluding short-term debt that the Organization for Economic Cooperation and Development uses to calculate its ratio.

The debt burden will be borne by a shrinking population that will be hard pressed to keep the economy growing fast enough in years to come, said John Richards, head debt-market strategist for the Asia-Pacific region at Royal Bank of Scotland Plc in Tokyo.

“The burden of this debt is going to be felt and it’s going to be much worse than people thought,” Richards said. “It’s going to result in higher interest rates and slower growth than Japan can otherwise achieve.”

Weighing Tax Increase

Aso, 68, said the government will consider raising the consumption tax from the current 5 percent once the economy recovers “in order to not leave a huge debt to our children.”

Bond yields are already rising, climbing to the highest in almost five months on April 9 on speculation the supply of debt will keep increasing as the government tries to spend its way out of the recession.

“Yields may rise as the government fails to give confidence that the stimulus package will improve jobs and consumption and boost tax revenue,” said Kyohei Morita, chief economist at Barclays Capital in Tokyo. “Higher government bond yields may lead to higher borrowing costs for companies,” stunting investment and economic growth, Morita said.

Aso pledged to create up to 2 million jobs in the next three years and boost demand by between 40 trillion yen and 60 trillion yen by focusing on industries such as solar power, electric cars and energy-saving consumer electronics.

That compares with the 3.5 million jobs U.S. President Barack Obama pledged to save or create with his $787 billion stimulus package. The 25 trillion yen in total spending announced by Aso since he became prime minister in September is about 5 percent of GDP, a ratio comparable to the U.S. stimulus.

Boost Demand

“Aso is very optimistic” on that jobs creation number when you compare it with Obama’s plan, Daley said. “When you throw $150 billion at an economy in one year, you will see an effect. It will not be long term, nor sustainable.”

The Nikkei 225 Stock Average erased its losses for the year, climbing 2.5 percent for the week after details of the stimulus were leaked by ruling party officials. Economists said the plan would help moderate the economy’s deterioration later this year.

“This new package likely will significantly boost domestic demand, mainly in private consumption and government investment, from the third quarter,” said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo.

Analysts said that fixing the country’s long-term fiscal problems is the key to stimulating domestic consumption and weaning the country off its export dependence.

Japan’s older generation is reluctant to spend after the government revealed two years ago that it had lost pension records for 50 million people, or more than a third of the entire population. Younger people are growing concerned that the system will have run out of money by the time they retire.

Retirement Worry

A record 84 percent of Japanese are worried about retiring because they say they lack savings, an annual Bank of Japan survey showed in October.

“What households and the elderly need to see in order for them to start spending money is evidence that they don’t have to worry about retirement,” said Shirakawa at Credit Suisse. “The government isn’t providing any relief or convincing plans for the future. It’s all cheap talk by politicians.”

About 460,000 people have lost their jobs since the Sept. 15 collapse of Lehman Brothers Holdings Inc., according to government data.

TO BE NOTED: From Bloomberg:

‘Lehman Shock’ Fuels New Wave of Homeless in Osaka (Update1)

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By Stuart Biggs and Masatsugu Horie

April 9 (Bloomberg) -- Within two months of losing his job packing shelves at a cold-storage company in Osaka, Toshiyuki Miki says, he was homeless. “Lehman Shock” turned his life upside down, he says.

Lacking the 60,000 yen ($600) a month he needs to pay rent, Miki, 40, sleeps in cardboard boxes under the elevated Hanshin expressway in Umeda, Osaka’s central business district. It’s his home as the global recession triggered by the implosion of Wall Street banks batters Japan. About 460,000 people have lost their jobs since the Sept. 15 collapse of Lehman Brothers Holdings Inc., according to government data.

“I never realized it would affect me in this way,” said Miki, who picked up the Japanese phrase “Lehman Shokku” from the pages of discarded newspapers. “Before, I could always find some kind of job, but now there’s nothing.”

Miki’s loss of housing shows how Japan’s 2.95 million unemployed people threaten to fuel a rise in homelessness. Prime Minister Taro Aso may unveil a 15.4 trillion yen stimulus package tomorrow, according to a document obtained by Bloomberg News. Finance Minister Kaoru Yosano said April 6 the package will include a new social safety net for non-regular workers.

Yosano didn’t specify what help would be given to the lower-paid temporary or part-time workers. They accounted for 34.5 percent of Japan’s 55.3 million employed in September 2008 compared with 24 percent in 1999, official data show.

‘Crisis Situation’

Japan’s jobless rate will soar to a record of 5.7 percent by the end of March 2010 after reaching a three-year high of 4.4 percent in February, according to a Bloomberg survey of 11 economists. That’s the highest since 1953 when records began. Companies from Toyota Motor Corp. to Sony Corp. are firing thousands of workers and reducing output as Japan’s exports plunged a record 49.4 percent in February.

“We’re seeing a crisis situation here,” said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. “The spike in unemployment is much faster, and younger people have much less of a buffer.”

Many are temporary workers like Miki who find themselves in a downward spiral with little savings and an inadequate welfare system to fall back on, said Michihiko Okino, secretary-general of a nonprofit group that manages a homeless shelter in Osaka.

Across Japan, 77 percent of unemployed people don’t receive benefits, according to an International Labor Organization report released March 24. That compares with 57 percent in the U.S. and 13 percent in Germany.

‘Serious Problem’

“You’re going to have a serious problem,” Okino said. “People will use their savings first, then stay with friends if they can. It’s what happens after that we are bracing for.”

Japan’s average unemployment rate since 1953 is 2.5 percent, less than half the 5.7 percent in the U.S., according to Bloomberg data. Unemployment is above 8 percent in the U.S. and the euro region.

The rate in Japan is historically lower because there are fewer women in the workforce and men have tended to have long- term contracts they hold onto, according to Julian Jessop, chief international economist at Capital Economics Ltd. in London. He forecasts a rate of about 5.5 percent for the end of March 2010.

A rush of newly homeless is expected starting in May as workers exhaust their savings after being released from six- month or annual contracts that expired at the end of the fiscal year on March 31, Okino said.

Welfare Applications

Applications for state welfare assistance in Osaka surged 30 percent in December and 54 percent in January. City officials say they fear a rebound in homeless numbers that they have brought down to 4,024 from 7,757 in 2003, according to an official count, as the economy expanded for 5 1/2 years to October 2007.

“The numbers will definitely increase,” said Kazuo Furuya, head of homeless affairs in the city government, which is already 5 trillion yen in debt. “It’s not just Osaka, it’s a national problem.”

Osaka, with its blue-collar working base centered on traditional steel, manufacturing and shipping industries, is an indicator of the nation’s economic health, Schulz said.

Miki is two decades younger than most men sleeping in the streets of Osaka, a city of 2.64 million people that is 400 kilometers (250 miles) southwest of Tokyo. It has the largest number of homeless of any Japanese city.

Miki said he came to Osaka a decade ago, having previously worked on building sites in Yokohama, 30 kilometers south of Tokyo, after graduating from high school in Hiroshima when he was 18. Until his cold-storage job ended, he secured enough short-term contracts and part-time jobs in construction to feed and house himself, he said.

Soup Kitchens

Homeless since October, he keeps his hair neatly groomed and his red jacket, blue jeans and sneakers clean. The only hint of his circumstances is the black nylon suitcase he carries everywhere, containing his belongings.

A 15-minute drive south of where Miki spends his nights is Airin, a district where shelters and soup kitchens have sprung up to serve hundreds of older day laborers who are veterans of the streets.

Workers came to Airin, known locally as Kamagasaki, in the 1960s to work on construction sites for the 1970 Osaka Expo, which is regarded as marking Japan’s recovery from World War II. During the building boom of the 1980s and early 1990s, Airin’s population swelled to as many as 120,000 in an area the size of 116 football fields. There were more jobs than workers, and accommodations were cheap.

200 per Job

Now there are 200 applicants for every job, up from 30 to 40 a year ago, said Eriko Otani, a career counselor at Hello Work, a placement agency that fills lower-paid or temporary jobs. The number of factories in Osaka declined to 16,913 in 2005 from 28,392 in 1995 as manufacturers shifted jobs overseas, government data show.

On a cold March afternoon, more than 300 men stood in line at the labor office that assigns the next day’s shifts. Most left dejected. In the evening in Airin’s dirt-covered park, dozens of men with graying hair and thick coats warmed themselves around a fire as others rummaged through trash piles.

A stream of homeless men arrived at the entrance of the area’s largest shelter, whose 20-foot pale green metal walls dominate the park. Each got a pack of plain biscuits and could take a shower before claiming one of the 1,040 iron-framed beds with a thin mattress and a blanket. The only rule is no alcohol.

Beds Filling Up

“The situation has never been as bad as this for the residents of Airin,” said Yoshiko Mochihara, manager of the shelter. Its beds, which usually fill up in May and June, are already approaching full capacity, and the nonprofit group is considering building another shelter in the north of the city, she said.

“Most newly homeless will choose net cafes and other parts of the city before they come here,” she said.

Noboru Moto, 60, said he is too old to be hired for one of the few construction jobs available, so he collects aluminum cans around Airin’s park to sell to scrap metal merchants.

Until last year, he could earn 160 yen a kilogram, or 2,300 yen a day, enough for three square meals, he said. A drop in aluminum prices means he now gets 50 yen a kilogram, reducing him to a solitary lunch box of rice, vegetables and a little meat sold at convenience stores, he said.

“I’ll keep collecting; what else can I do?” Moto said, pausing by his cart with his prized possession, a pocket radio in a plastic bag tied to the handle.

‘Dirty and Smelly’

Miki tried sleeping in Airin but was put off by the conditions.

“It’s just not a good place, dirty and smelly,” he said. “There are better places to go that aren’t so desperate.”

No one knows how many like him are moving on to Osaka’s streets, charity officials say.

In 2004, then-Prime Minister Junichiro Koizumi extended labor laws, allowing carmakers and other manufacturers to use more lower-paid temporary workers and for longer periods. That helped employers cut production costs because they could hire and fire to meet demand.

“The labor laws switched the burden for supporting Japan’s workforce from the companies to the government,” said Wataru Kishi, in charge of welfare assistance at Osaka’s city government. “The issue is whether the government can provide the support or the entire system will collapse.”

Japan’s national government, which pays 75 percent of welfare costs, according to Kishi, has already pledged 1.1 trillion yen in economic stimulus to subsidize temporary workers’ jobs and house those out of work.

‘Felt Ashamed’

In December, the government announced it secured 13,000 housing units nationwide to give to the newly unemployed. It also said it would pay companies 60,000 yen a month to keep temporary workers they planned to eliminate on the payroll. The subsidy lasts for 6 months.

Miki said he didn’t know he might be entitled to assistance and hasn’t applied for any.

Instead, he makes around 3,600 yen a day from selling the Big Issue, a magazine for the benefit of homeless people, outside the Hankyu railway station in northern Osaka from 8 a.m. to 7 p.m., he said. That’s far less than the 260,000 yen a month he reports making in a 60-hour week at his packing job.

“The first time I sold Big Issue, I felt so ashamed,” he said. “But I’m not doing it out of choice. This could happen to anyone.”

Miki said he reads newspapers he finds looking for signs of an economic rebound. For now, he said, he worries that a prolonged recession may reduce the number of shoppers who buy the Big Issue.

“If that happens,” he said. “I’m really going to be in a tough spot.”

Taro Aso told Kaoru Yosano

TO BE NOTED: From the FT:

"Japan prepares record fiscal stimulus

By Michiyo Nakamoto in Tokyo

Published: April 7 2009 03:00 | Last updated: April 7 2009 03:00

Japan's prime minister told his government yesterday to prepare a record fiscal stimulus package to lift the world's second-biggest economy from its deepening gloom, with real spending exceeding 2 per cent of gross domestic product or more than Y10,000bn.

Taro Aso told Kaoru Yosano, the finance and economy minister, to work on a stimulus plan focused mainly on five key issues: a new social safety net for non-regular workers, full use of government financial institutions to ease the credit crunch, a big expansion of solar energy, improvements to healthcare and medical services, and subsidies to local governments for the revitalisation of regional economies.

The government plans to unveil details of the package on Friday, and aims to submit necessary legislation to the Diet before the Golden Week holidays in late April and early May.

Japan has already implemented a range of stimulus measures totalling Y12,000bn ($119bn) in actual government spending under Mr Aso to combat the impact of the global recession,as recommended by the International Monetary Fund.

However, the Japanese economy has remained under severe stress, with exports plunging by record amounts over the past few months.

GDP fell by 3.3 per cent quarter on quarter in the last three months of 2008, and the most recent business sentiment survey by the Bank of Japan, released last week, showed that optimism had deteriorated to a record low.

The measures come amid mounting suggestions that Mr Aso may be preparing for a general election.

The prime minister must call an election for the powerful lower house of parliament by the end of September. But popular discontent with his ruling Liberal Democratic party has made the timing of the election difficult for him.

The latest stimulus package "stops things from getting worse . . . [but] it doesn't necessarily make things better", said John Richards, head of research at Royal Bank of Scotland in Tokyo.

The gap between Japan's potential and actual output was about Y20,000bn, so the government was filling about half of that, said Mr Richards. "It's big [but] it certainly isn't too much."

The measures to provide a safety net for non-regular workers and to improve medical and healthcare services were likely to be effective in stimulating economic activity, although "the devil is in the details", he said.

However, measures to support local government to revitalise regional economies could end up simply increasing unnecessary public works projects, said Masaaki Kanno, the chief economist at JPMorgan in Tokyo.

"Japan has been doing the same things since the 1990s. They should do things that they can't normally do, which require strong leadership," said Mr Kanno.

In addition to the five pillars of the new stimulus package, the LDP is finalising proposals for a temporary relaxation of Japan's so-called gift tax, which is aimed at spurring a transfer of wealth from older to younger people.

The LDP is proposing to increase the amount that is exempt from the gift tax if wealth transferred from the older to younger generation is used to buy real estate.

www.ft.com/asia-pacific

Copyright The Financial Times Limited 2009"

"“We are not that stupid. We are not that desperate in Japan,” he said. "

Wow. Check out the stimulus debate in Japan. I thought it was a done deal. From the FT:

"Yosano rejects increased public spending

By David Pilling and Mure Dickie in Tokyo

Published: November 30 2008 20:02 | Last updated: November 30 2008 20:02

Kaoru Yosano, Japan’s minister for economic policy, has attacked calls for higher public spending.

He said Japan could not afford to add to its gross public debt, already about 180 per cent of national output, the highest in the advanced world.

Mr Yosano told the Financial Times in an interview: “We are already deep in debt, so to create effective demand for instant pleasure would not be wise.”

The minister said the government was unlikely to find many worthy targets for stimulative funding."

I wonder how Yosano would do here.

"Constructing more public buildings – a favoured economy-boosting method in the past – would be “stupid” since maintenance costs would be a long-term burden, he said.

Faster expansion of the national Shinkansen high-speed rail network looked like a decent option, the economy minister said.

But policymakers in the ruling LDP party are not keen.

“We don’t have very good public works any more,” Mr Yosano said."

This guy's a barrel of laughs.

"Some may disagree. The government has been attacked for cutting incentives for private spending in technologies such as solar power that would help protect the environment and reduce greenhouse gas emissions.

Direct government investment could, for example, play a vital role in building the recharging infrastructure needed to make electric vehicles more commercially viable. Mr Yosano did urge more spending on unemployment benefit, saying the government could mitigate the social effects of recession by, for example, doubling to a year the period that benefits could be paid.

Conditions were unlikely to become as bad as 1929. “These difficulties are not impossible,” he said."

Thanks for the six months Yosano.

"Teizo Taya, special counsellor to the Daiwa Research Institute, said Japan had learnt that deficit spending was dangerous, and western economies would find that running big deficits could lead to uncontrollable inflation.

“We are not that stupid. We are not that desperate in Japan,” he said."

I'm definitely worried about inflation, but Taya and Yosano have me beat by a wide margin. Apparently, we are that stupid and desperate.

"However, Shijuro Ogata, a former Bank of Japan official, attacked what he said was Japan’s overly passive response.

“These people are so fatalistic. They are always talking about the world’s impact on Japan, not Japan’s impact on the world.”

He said Japan could not be a locomotive for the global economy but it could take bolder emergency fiscal measures and try to stimulate personal consumption in the medium term."

It doesn't sound like the Japanese are Keynesians.