TOKYO (AFX-ASIA) - Finance Minister Masajuro Shiokawa said intervention remains an option for the government if the weakening of the dollar/yen market accelerates.
He added that Haruhiko Kuroda, deputy finance minister, is in contact with other G7 countries with the aim of eliminating speculative action in the foreign exchange markets.
"I feel the Japanese currency, as well as stocks, are exposed to strong pressures. Kuroda is now keeping in contact with G7 countries to remove speculative action in forex markets," Shiokawa said. "I want to see the dollar/yen return to a stable level through international cooperation," he said told reporters after a cabinet meeting.
Asked whether international cooperation means market intervention, Shiokawa said: "At present I cannot talk about that but if the forex movement sharply accelerates that may be necessary." He added: "I'm very concerned that the Dow (Jones Industrial Average) plunged so sharply. However, I have to say that we have immediate measures to counter the weakness of stock prices in Japan." The government will concentrate on its existing reforms, Shiokawa said.
"We want to stimulate the stockmarket through promoting deregulation and an early revision of the securities tax system," he said.
"At today's Cabinet meeting the government decided to announce a schedule for the preparation of deregulation measures and yesterday I urged the LDP tax panel chief to study securities tax revisions as soon as possible," he said.
"The party promised to start tax discussions on September 5," he said.
"At today's cabinet meeting, the prime minister said he wants to consider compiling a supplementary budget after seeing the result of second quarter GDP data," Shiokawa said. "But we will keep our promise of limiting to 30 trln yen government bond issuance even then."
On proposals by former LDP policy chief Shizuka Kamei for an additional 30 trln yen in spending, he said: "I think he has not specified the timing of the additional spending so we need to hear details from him and I want to see him soon."