Japan sees withdrawing economic stimulus 'still premature'+

ISTANBUL, Oct. 6 Kyodo -
Japan believes it is still ''premature'' to withdraw economic stimulus as the
nation's historically high level of unemployment and weak exports cast doubts
over prospects for a steady recovery from its worst recession in decades, the
Japanese senior vice minister of financer said Tuesday.

In a speech at a two-day annual meeting of the International Monetary Fund and
the World Bank in Istanbul through Wednesday, Senior Vice Finance Minister
Naoki Minezaki said although the Japanese economy is showing signs of recovery,
it is still necessary to ''cautiously'' monitor economic developments and
continue appropriate fiscal and monetary policies.
''While it is necessary to discuss exit strategies, at this moment, their
implementation is still premature,'' Minezaki said.
Japan's economy expanded for the first time in five quarters in the three
months to June and industrial output rose 1.8 percent in August from the
previous month, for the sixth consecutive month of growth. But the nation's
unemployment stands at 5.5 percent in the same month, just a shy of a
record-high 5.7 percent logged the previous month, and exports were 36 percent
smaller than a year earlier.
Minezaki also said Japan's new government will shift its economic policy to put
more emphasis on boosting private demand, rather than the conventional spending
focused on public investment, while also accelerating efforts for fiscal
consolidation.
''The priority of fiscal expenses will shift from public investments to support
for household spending and human capital development,'' he said.
Japanese Prime Minister Yukio Hatoyama, who took office last month after his
Democratic Party of Japan won a landslide election victory to oust the
long-dominant Liberal Democratic Party, pledged to put more money toward
ordinary people's lives, such as by focusing on expenses for child rearing, a
cut in the gasoline tax and scrapping highway tolls.
==Kyodo