***The editor-in-chief doesn't endorse gambling, drinking or taking excessive amounts of cough medicine at G7 summit press conferences.***
It's old news now but the resignation of Shoichi Nakagawa as finance minister is providing an endless amount of fodder for the media both here and abroad. Nakagawa, who is notorious within political circles for his drinking habits, stills insists that he simply took too much cough medicine and sipped a bit of wine.
If Nakagawa was looking for an excuse he should have just pointed to the state of the economy. That's enough to drive anyone to drink, and no-one more so than the finance minister.
For those who missed it, here it is again:
I'm going to have a little sportsman's wager with all the JIN readers now – this really is anyone's game here – Which LDP politician will resign in disgrace next? Please send your answers to: email@example.com . The winner will be announced in the JIN that follows the next resignation.
Of course, Nakagawa is not the only public figure who would be feeling the pressure -- Bank of Japan Governor Masaaki Shirakawa is under equal amounts of stress at the moment. He seems to be holding it together somewhat better than Nakagawa. Shirakawa and the independent BoJ have come under increased pressure from the ruling party to print more yen to make sure the currency stays where it is. Some within the government mentioned a while back that they would even consider creating a new currency to combat hyper deflation.
At last check the yen was at about 93.5 per dollar. In six months the currency has seen a 17 percent increase making life extremely harsh for the nation's exporters. Nissan has announced that it is facing its first loss in nine years.
The BoJ yesterday widened its asset-purchase program, buying corporate bonds for the first time to make sure that a shortage of credit doesn't worsen the recession. The bank announced it will buy $10.7 billion in corporate bonds.
Bloomberg reported that the central bank will buy 3 trillion yen of commercial paper as well as providing unlimited collateral-backed loans to financial institutions until September.
"We implemented these measures to ease concerns companies are having about funding," Shirakawa told Bloomberg. "Unfortunately, we have to assume that conditions for corporate financing will remain very severe."
There have been lots of "records" and "worsts " and "mosts" since Lehman's went down….
So here's one more from the quoted Bloomberg article.
"The economy shrank at an annual 12.7 percent pace last quarter, the most since 1974."
If I was the finance minister, I would have printed that out and taken it to the press conference.