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Japan's Business Leaders Support Help for Ailing Banks - 2002-01-07


The heads of Japan's four most powerful business organizations say they support the use of public money to help the country's ailing banks. They also are not concerned about the yen's current weakness.

Japan's top four economic generals in the private sector Monday held a joint news conference to announce their backing for a controversial plan to inject tax money into the troubled banking system.

The chairman of Fuji Xerox, Yutaro Kobayashi, who heads the association of corporate executives known as Doyukai, says the government has no choice but to help the banks.

Mr. Kobayashi says the government has to take every possible measure to avoid financial chaos. He says that to clean up all the bad loans, public funds must be transferred into the banks.

Japan's banks are staggering under billions of dollars worth of bad loans, most of which will never be repaid. Until that burden is eased, banks are unable to lend to healthy companies, which slows efforts to improve the economy. However, the past attempts to shore up the banks with tax money have met public opposition.

The industrial leaders say the yen's weakness against the U.S. dollar is not a major concern. The chairman of the Federation of Economic Organizations, Takashi Imai, said a fall to 140 yen from the present level of around 130 yen is possible. Mr. Imai, who also is chairman of Nippon Steel, says the yen's present weakness is a plus for the economy, because it helps exporters by making their products more competitive in the world marketplace.

But some Japanese companies and politicians have warned that a weak yen will actually harm some businesses, especially those that import raw products. Japan's neighbors also are worried about the weak yen, because it makes their goods more expensive in Japan.

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