Japan’s cabinet has held an emergency session to work out ways to calm the country’s volatile stock markets and to fend off further fallout from the global financial crisis.
Japan’s stock markets have been slammed by relentless bad economic news.
They have retreated sharply over the past two weeks and the government is concerned about the effect that is having on the real economy.
The rapid rise of the Japanese currency the yen against the dollar and also against the euro is making things difficult for Japanese exporters as their products become more expensive
The yen has been excessive volatility of late, on Friday it touched a 13 year high against the dollar before dropping a little this week.
Tokyo is worried about the effects this volatility could have on economic and financial stability.
But Japan’s Prime Minister Taro Aso was upbeat as he said: “A strong yen isn’t all bad for Japan. Let’s consider the positives as well. The newspapers are only writing negative stuff and write about it as if the nation was about to go bankrupt tomorrow but that isn’t true. Japan is being looked upon by the whole world right now with a sense of hope.”But there is not much of a sense of hope in the country’s banks.
Just weeks after Japan’s biggest, Mitsubishi UFJ, bought 21 percent of Morgan Stanley for 7.23 billion euros it has said it needs to sell new shares to raise 8.6 billion euros.
At the same time the Japanese government said it will massively expand a fund to re-capitalise banks.