Japan's finance chief to prioritize economy over fiscal health+

TOKYO, Sept. 16 Kyodo -
Japan's new finance minister, Hirohisa Fujii, said Wednesday he will put
improving the economy at the top of his list of priorities, rather than fixing
the nation's troubled fiscal position.
Fujii, a Democratic Party of Japan heavyweight widely regarded as a fiscal
conservative, has long stressed the importance of slashing the nation's huge
debt and the need to raise the consumption tax from the current 5 percent to
finance soaring social welfare costs.
But the 77-year-old minister said, ''The economy is the most important. For
people's lives, it is the economy.''
''Of course, government finances are important, but my principle is that the
economy comes before government finances,'' Fujii told reporters in front of
his home in Tokyo.
Speaking in line with the DPJ's strong focus on stimulating domestic demand,
Fujii said, ''First up is completely implementing the party's pledges laid out
in its manifesto,'' which include monthly allowances for families with
children, scrapping expressway tolls and cuts in gasoline taxes.
Fujii was a Finance Ministry official for 21 years before he was first elected
in 1977 to the House of Councillors on the ticket of the Liberal Democratic
Party.
He later quit the LDP and served as finance minister in a coalition government
when the LDP was briefly ejected from power in 1993.
Fujii said he did not receive any instructions from Japan's new leader Yukio
Hatoyama when he accepted the offer of the finance minister's position over the
phone around 6 p.m. Tuesday.
Fujii said he had prepared himself to become the next finance minister,
considering that Hatoyama had asked him not to retire from politics before last
month's House of Representatives election and listed him as a DPJ proportional
representation candidate.
However, his remarks Wednesday on the currency market caused some reaction
among market players and government officials.
''I don't believe the currency market is in a wild swing now,'' Fujii told
reporters in the Diet when asked about recent foreign exchange movements. ''I
am opposed to intervening when the market is calm.''
It is rare for Japan's finance minister to make off-the-cuff remarks about the
currency market, especially in relation to the current level.
He also said there are positive aspects to the yen's appreciation against other
currencies, suggesting that a stronger yen would help to meet the DPJ's goal of
making the economy more domestic demand-driven.
Fujii's remarks prompted strong buying of the Japanese currency, with the U.S.
dollar briefly pushed down to the lower 90 yen zone.
As to whether Fujii has already set any direction in drafting the budget for
the forthcoming fiscal year, he said, ''I started from last night, thinking
really hard in my sleep.''
But he said the first main task will be how to rework the fiscal 2009 extra
budget, already crafted by the LDP, to raise enough funds for the
implementation of the DPJ's key pledges starting in fiscal 2010.
Fujii also said he will head the government's tax panel.
On Wednesday, outgoing Finance Minister Kaoru Yosano said Fujii is ''the right
person'' for the job.
''I get along well with Mr. Fujii,'' Yosano, a veteran LDP lawmaker, said at a
news conference. ''He knows everything about how to work toward sound public
finances. So I have nothing to tell him'' about what needs to be done.
==Kyodo