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LDP to call for delay in limiting bank shareholdings.

TOKYO, March 10 Kyodo

Senior lawmakers of the ruling Liberal Democratic Party (LDP) have agreed to urge the government to delay imposing a limit on Japanese banks' shareholdings to help alleviate selling pressure from the banks, LDP officials said Monday.

The lawmakers also agreed to ask Toshihiko Fukui, who is to become Bank of Japan (BOJ) governor later this month, to issue a strong message showing his resolve to carry out accommodative monetary policy, the officials said.

The agreement was reached at meetings held Monday after the key Nikkei Stock Average briefly dipped below 8,000 for the first time since March 1983.

As the Tokyo stock market continued its downtrend in the wake of heightened tensions over Iraq and North Korea, there are growing calls in the LDP to urge the government to come up with countermeasures, including an extra budget for fiscal 2003.

The senior LDP lawmakers, including Taro Aso, LDP policy chief, and Hideyuki Aizawa, head of the LDP's antideflation panel, agreed to call for delaying a limit on banks' shareholdings for two years, the officials said.

The banks will be required to limit the value of their shareholdings in other firms to an amount less than their primary capital from their earnings reports in September 2004.

Other LDP lawmakers, including LDP Secretary General Taku Yamasaki, also agreed to ask Fukui to issue a statement to the Japanese public, pledging the BOJ will join forces with the government in conducting monetary policy.

But some other LDP lawmakers, such as Hiromu Nonaka and Shizuka Kamei, are calling for an extra budget for fiscal 2003 beginning in April as the market is nervous about geopolitical risks surrounding a possible attack on Iraq, the officials said.
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Publication:Japan Policy & Politics
Date:Mar 10, 2003
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