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2009年3月 4日 (水)

世界同時株安 3月危機回避に全力挙げよ

The Yomiuri Shimbun (Mar. 4, 2009)

Try everything to avoid a March market crisis

世界同時株安 3月危機回避に全力挙げよ(34日付・読売社説)

With the crisis affecting European and U.S. companies having taken yet another turn for the worse, stock markets are sliding globally.


The government and the Bank of Japan should draw on every available policy tool to avoid a so-called March crisis--a situation in which stock prices plunge toward the end of the fiscal year, when most Japanese companies close their books.


The latest fall in the stock markets was triggered by the U.S. government's decision to inject more money into U.S. insurance giant American International Group Inc., which posted more than 60 billion dollars losses in the October-December quarter.


On Monday, the Dow Jones industrial average fell 299.64 to 6,763.29, its first drop below 7,000 in about 12 years. Major European stock markets also tumbled.


In Tokyo on Tuesday, sellers led buyers, pushing down the 225-issue Nikkei Stock Average to just above the 7,000 level at one point.


Stock prices are now about 40 percent lower than at the end of the midterm period in September. Banks, securities firms and insurance companies, which own a large amount of stocks, likely will post huge losses in their account settlements at the end of this month should stock markets remain in the doldrums.


A further decline in stock prices likely will lead to a vicious cycle in which financial institutions become reluctant to extend loans, and the real economy worsens as a result.



No time to lose

Although the Nikkei rebounded from its earlier fall to end at slightly lower than Monday's close amid expectations that the government's measures will buoy the flagging stock market, a failure to quickly turn such expectations into reality could trigger a new wave of selling by disappointed investors.


The government and ruling parties are discussing a variety of ideas to prop up the stock market, including setting up a new organization to buy stocks and the expansion of stocks to be purchased by the Banks' Shareholdings Purchase Corporation. However, neither move is likely to be realized by the end of this month due to delays in revising relevant legislation.


The government should stop dragging its feet and carry out policies in timely manner. Its failure to do so would risk accelerating the economic downturn.


We hope the government and the Bank of Japan will coordinate their policies by combining measures on equity supply and demand, such as outright purchases of stocks, with macroeconomic measures to prop up the entire economy.


For instance, steps to arrest the fall in stock prices that can be carried out immediately should be promoted positively, such as the purchase of bank-held stocks by the BSPC and central bank.



Govt, BOJ must act in concert

Though it is now certain that the fiscal 2009 budget will pass the Diet within the current fiscal year, it is crucial that bills related to the budget, which are needed to implement job-creation measures and mortgage tax cuts, are drafted within the current fiscal year.


The domestic economy saw a demand shortfall of about 20 trillion yen in the October-December period. Some private organization estimates say this will snowball to 40 trillion yen-50 trillion yen. Since deflation caused by the demand shortfall has now become a real possibility, the government must formulate and implement additional pump-priming measures to follow the fiscal 2009 budget as soon as possible.


As overseas factors have played a major role in causing the stock market plunge and the economic downturn, it is very difficult for Japan to cope with the situation alone.


At this juncture, international coordination of policies to prevent the global financial crisis from expanding is vitally important.


(From The Yomiuri Shimbun, March 4, 2009)

2009340118  読売新聞)


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