Tokyo, March 17 (Bloomberg) -- The Japanese government is not considering drafting an extra budget for the fiscal year starting April 1 to shore up the world's second-biggest economy, Vice Finance Minister Masakazu Hayashi said. ``We are not thinking about additional fiscal measures,'' Hayashi told reporters at his regular press conference. The priority is to enact the budget for fiscal year 2003, which starts next month, as soon as possible, Hayashi added. Japan requires as much as 10 trillion yen ($84 billion) in extra spending to bolster the economy, ruling Liberal Democratic Party Policy Council Chairman Taro Aso said yesterday. ``To boost weak domestic demand, extra spending is needed,'' Aso said on Asahi Television's ``Sunday Project'' program, when asked what the government should do for the economy. ``About 5 trillion to 10 trillion yen would be necessary,'' he said.
Hayashi also said Japanese stocks are sliding due to the uncertain situation involving Iraq. The Nikkei shed 131.05, or 1.6 percent, to 7871.64 at the 3 p.m. close in Tokyo. The average is 9.2 points above the March 11 close, which was the lowest since January 1983. Trading was the slowest in five weeks. Hayashi added that the government and the central bank need to work together to tackle deflation. ``It's important to exchange opinions thoroughly while respecting the central bank's independence,'' Hayashi said. ``It would be great if we can improve our communications with the new BOJ leaders.'' Toshihiko Fukui succeeds Masaru Hayami as Bank of Japan governor on March 20. The lower house of parliament has also approved the appointments of Toshiro Muto, a former vice finance minister, and Kazumasa Iwata, a senior Cabinet official, as deputy governors of the Bank of Japan. The government and the central bank will hold regular meetings to coordinate their policies, Finance Minister Masajuro Shiokawa said on Friday. //www.quote.bloomberg.com