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Wednesday, 4 April, 2001, 09:44 GMT 10:44 UK
Japan delays economic plan
Prime Minister Yoshiro Mori and Taro Aso, the economics minister
Prime Minister Yoshiro Mori and Mr Aso delay the new economic plan
Japan has announced that it will delay the release of its emergency economic plan until Friday.

The much awaited package, which was due to be unveiled on Wednesday, aims to breath new life in the country's flagging economy and to overhaul the banking system.

Delay of the package follows lack of agreement between the government and its coalition parties.

The main sticking point is the timing of a new fund designed to buy shares - worth about 43 trillion yen ($342bn) - held by ailing Japanese banks.

Taro Aso, the economics minister
Mr Aso considers a reporter's question on the delay of the programme
The banks' shareholdings have been hard hit by the falls in Tokyo's stock markets.

Economics minister Taro Aso told a news conference that coalition lawmakers wanted to set up the find during the current session of parliament, which ends on 29 June.

Some government officials, however, want to wait until September.

'No disagreement'

Later in the day, the government played down talk of a disagreement, saying that the fund would be launched as soon as possible.

There has also been debate over proposed tax changes relating to the stock market.

The stock markets, which spent most of the day heading down before rallying just before the close, did not seem unduly affected by the delay of the package.

Tokyo's benchmark Nikkei average climbed 0.90% at the end of the trading session to close at 13,242.78.

Tackling the banks

Investors are hoping that the new economic measures will be more wide-ranging than previous attempts to kick-start the stagnant economy.

They would like to see definite measures to tackle the mountain of bad debt on the banks' balance sheets.

Mr Aso said banks would be given two years to get rid of their existing loans to companies that are bankrupt, or at risk of failing.

Japan's financial regulator has estimated last September that there was 32 trillion ($253bn) in non-performing loans on bank balance sheets.

Last month the Bank of Japan returned to a zero-interest rate policy in another move to solve the country's economic problems.

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See also:

19 Mar 01 | Business
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