FACTBOX-UPDATE 1-Recent comments by Japan PM-to-be Kan

(For more stories on the Japanese economy, click [ID:nECONJP],
for stories on Japanese politics, click [ID:nPOLJP])

June 4 (BestGrowthStock) – Japan’s ruling Democratic Party picked
former finance minister Naoto Kan, a fiscal conservative once
best known for battling bureaucrats, as the country’s next prime
minister ahead of an upper house election expected next month.

Following are key recent quotes by Kan.

ECONOMY, FISCAL POLICY

June 3

“I think Japan would have avoided a long economic slump and
massive fiscal deficits if it had not erred on economic and
fiscal policies.

“By compiling new growth strategies and fiscal reform plans
in June, I plan to achieve a strong economy, public finances and
social welfare system in a unified manner.”

“For the past 20 years, Japan’s economic policies were wrong.
I want to seek to boost growth by creating jobs.”

“We initially expected to cut a considerable amount of waste
to come up with new budgets and financial resources. But we
haven’t been able to do so as quickly as we expected. We will
continue to make efforts, but this is one item in the manifesto
that has taken longer than initially thought.”

May 17

“Limiting bond issuance does not mean I am saying we will
shrink fiscal spending…

“Japan is in deflation, so we need a certain amount of fiscal
spending to keep money circulating.” [ID:nTOE64G063]

May 11

“Markets are becoming sensitive to sovereign risk, so in
order to prevent this from happening we need to make as much
effort as possible so that (new government bond) issuance does
not exceed 44.3 trillion yen.”

MONETARY POLICY

June 4

“I will strive to beat deflation through comprehensive
policies implemented by the government and the BOJ.”

April 20, when asked about inflation targeting

“It is not an outlandish target at all. I think it is worth
listening to.” [ID:nTOE63J033]

March 23

“The BOJ is buying a considerable amount of JGBs from the
market now and the BOJ is taking various steps while setting a
self-imposed rule with regard to bank notes. I’m not considering
revising the law to let it directly underwrite JGBs.”
[ID:nTKF10689]

FOREX

May 11

“Since I became finance minister, I have had doubts about
whether Japan really needs such a large amount of foreign
reserves. The size is quite big compared with other countries…

“But in general, when we sell foreign currencies, that will
mean buying yen and therefore would trigger yen rises. We need to
avoid anything that will push the yen higher than now.”
[ID:nTKF106934]

DIPLOMACY

June 3

“The issue of U.S. bases in Okinawa is a very difficult one
as it involves lessening the burden on the people of Okinawa and
maintaining a trusting security relationship between Japan and
the United States. We need long-term efforts with the aim of
lessening the burden on Okinawa based on the U.S-Japan deal.”

“I believe the Japan-U.S. relationship is the foundation of
Japan’s diplomacy… The course we need to take is to maintain a
trusting relationship with the United States and at the same time
to consider China as equally important. I think that’s the right
course for Japan’s future as well.”

MONEY AND POLITICS

June 4

“To be able to regain public confidence, we need to first
show our firm stance about problems of money and politics. I will
implement policies based on clean politics.”

“The first thing we need to do is to regain public trust…
All the lawmakers and party members need to pull up their
collars. I may not be confident to say I am 100 percent
innocent…. but I have been making the utmost effort in my
political activities.”

June 3

“(Ruling party heavyweight Ichiro) Ozawa should be quiet for
a while. That would be good for him, for the Democratic Party and
for Japanese politics.”

OTHER POLICIES

June 4

“This morning at the cabinet meeting, Prime Minister Hatoyama
asked his cabinet members to tackle the issues he has been
tackling.

“First, reforms towards allocating more power to regional
governments; second, seeking new ways in public services; third,
(the establishment of) an East Asian community; and fourth,
achieving the target to cut greenhouse gas emissions by 25
percent… I promise to you that I’ll exert all my strength to
tackle these four issues as my own goals.”
Investing

(Reporting by Tetsushi Kajimoto, Yoko Nishikawa and Kiyoshi
Takenaka; Editing by Hugh Lawson)

FACTBOX-UPDATE 1-Recent comments by Japan PM-to-be Kan