TOKYO AFX-ASIA) - Nikkeiren (Japan Federation of Employers' Associations) chairman Shiroshi Okuda said the group is seriously concerned at the fall in the stockmarket below 12,000 points. "I think stock prices falling below 12,000 points is a problem and I am seriously concerned over this development," Okuda said. "If the current downturn in the market continues, the Japanese mywaylong economy will likely fall into a vicious cycle because consumption and corporate capital spending will go down as well.
"The government should take measures to boost stock prices as soon as possible," he said, adding that it should set up a stock purchasing body.
Nikkeiren Vice Chairman Toru Hashimoto, who is also chairman of the Mizuho financial group, said if stock prices continue to fall, it will impact the banks' capital adequacy ratios.
"The major banks' capital adequacy ratios, which now stand at 11 pct on average, could decline by around 0.5 percentage points," Hashimoto said.
He said the government should use to tax incentives to attract more retail investors into the stockmarket by September, when Japanese companies will begin to report results with their shareholdings assessed on a mark-to-market price basis.