Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

• Recent market trends and Abe administration's economic policy
• Healthcare and medical strategy
• The current situations of North Korea

REPORTER: I have a question concerning the markets. The Nikkei Stock Average is now trading in the 12,200 yen range and the yen has moved to around 95 to the dollar. Both of these indices are moving to levels more-or-less as they were prior to the Lehman Shock, with the Nikkei Stock Average having risen 40 percent since the announcement of the dissolution of the Diet by former Prime Minister Noda last year. If we look at levels prior to the Lehman Shock it may be early to suggest that they have recovered, but can we ask for your views on these market trends, concerning your previous statements that it is better for stock and foreign exchange indices to be higher than lower.

CHIEF CABINET SECRETARY SUGA: If I may, since the inauguration of the administration of Prime Minister Abe, the stock average has risen approximately 40 percent. The excessive yen appreciation is also being corrected and stock prices are recovering as the markets look ahead in anticipation of an economic recovery. I also think that there has been a significant improvement in business sentiment. Some people may refer to it as a change in perspective or mindset. Since the beginning of the year these trends have also started to affect personal consumption and the real economy in particular. Currently the stock average is up approximately 40 percent and by continuing to steadily advance "Abenomics" we will work to ensure that this improvement is something that can actually be felt.

REPORTER: Some experts and Diet members from opposition parties who are familiar with economic strategy have noted that in order to sustain the current trends, such items as growth strategy and regulatory reform will be of great importance. At the same time they are questioning whether the administration of the Liberal Democratic Party (LDP) can actually implement such policies or strategies, in light of the fact that these were not achieved in the past. What is the resolve of the Abe Administration to lead the economy forward?

CHIEF CABINET SECRETARY SUGA: The Abe Administration has set out "three prongs" to restore a robust economy. In his recent policy speech to the Diet, the Prime Minister stated that the Government will vigorously launch these three prongs. First of all, with regard to the Bank of Japan (BOJ), we have submitted for Diet approval candidates for governor and deputy governors who are prepared to implement bold monetary easing and we will work to ensure that these candidates gain the approval of the Diet. Secondly, we achieved the passage of the supplementary budget, gaining a majority vote even in the House of Councillors. The budget for fiscal 2013 is currently being deliberated in the Diet and we will work steadily to achieve its passage. Thirdly, with regard to regulatory reform, we will make every endeavor to push through such reforms and work to ensure that the achievements of Abe Administration are highly evaluated not just in Japan but globally.

REPORTER: In the Diet Budget Affairs Committee the Prime Minister has just stated his view that in order to create a virtuous circle in the economy, it will be important to ensure that the current correction of the strong yen and rising stock market prices are actually translated into employment and increased wages. The Prime Minister also cited the cases of a few companies who have announced wage increases. How do you view these trends and what is your outlook for how they will develop in the future?

CHIEF CABINET SECRETARY SUGA: If personal remuneration increases, then employment will also expand. This is a cycle that we are seeking to achieve and the current stock average is a reflection of that and I believe that at the end of March various companies will make a judgment on remuneration accordingly. If the situation continues as it is at present, then there are expectations that settlements for the financial year will be positive and in excess of initial projections. During the October to December quarter pension funds invested in shares saw an increase in value of 5 trillion yen. This is the second largest rise ever and I believe that we can also expect good results for the January to March quarter also. In addition, it had previously been decided that the Government's share holdings in Japan Tobacco (JT) would be sold off, and the JT share price has now risen to the extent that the sell-off of Government share holdings will result in income of 300 billion yen more than when the sell-off was decided. These various indices show that the economy is starting to move forward steadily and this upturn in the economy is something that can be passed on to the people of Japan. I would say that confidence is increasing to the extent that if the current conditions continue it will definitely be linked through to increases in remuneration and expansion of employment.

REPORTER: There are press reports that suggest the Government will seek to sell the universal health insurance system model overseas. What are the facts behind these reports and what is the relationship between these reports and the Office for Healthcare and Medical Strategy that is under your direct jurisdiction?

CHIEF CABINET SECRETARY SUGA: We are confident that the universal health insurance system of Japan is one of the most advanced in the world and that it is extremely well regarded by other countries. If the mechanisms and functions of our universal health system are required by other countries and people around the world, then we have a strong desire to expand the strengths of our system further afield. To date this is not something that the Office for Healthcare and Medical Strategy has been deliberating as the possibilities are still being considered.

REPORTER: I have a question relating to the third of the three prongs, namely growth strategy that you just mentioned and regulatory reforms. I believe it was last weekend when Prime Minister Abe recorded an interview for the World Business Satellite program. In this interview he expressed his intention to submit draft bills relating to regulatory reform in the medical sector during the current session of the Diet. What is the current status of considerations on such draft bills?

CHIEF CABINET SECRETARY SUGA: This is a matter that is still being given consideration. However, the health sector represents a significant part of areas for deregulation and the Government is seeking to make every effort to implement deregulation and regulatory reform.

REPORTER: I get the impression that the Abe Administration has positioned the health and medical-related sector as a key part of growth strategy. However, there are voices of concern being heard from the Ministry of Health, Labour and Welfare (MHLW) and also from within the LDP concerning such issues as the lifting of the ban on online sales of pharmaceutical products. What discussions are being held concerning ways to strike a balance in terms of regulatory reform in the health and medical-related sector?

CHIEF CABINET SECRETARY SUGA: The Office for Healthcare and Medical Strategy was launched to consider such issues. There are many significant issues for regulatory reform in this sector, including the issues of approval and time required for approval, among others. With regard to online sales of pharmaceuticals, I believe that the MHLW and LDP will engage in thorough deliberations on this issue, including safety considerations, as accidents must not be allowed to happen.

REPORTER: What is the role of the Office for Healthcare and Medical Strategy? Is it an organization for coordinating budget allocation, or for considering measures to be incorporated into growth strategy? Could you tell us specifically about the office's role?

CHIEF CABINET SECRETARY SUGA: The office has both of the functions that you mentioned. Health and medical care is a growth sector and one that Japan is lagging behind the rest of the world in promoting. The aim is to implement bold regulatory reform while overcoming government's vertically-segmented administrative structures and thus promote growth in this sector.

(Abridged)

REPORTER: I have a question relating to North Korea. Given the statement issued by the North Korean Committee for the Peaceful Reunification of Korea this morning, what preparations is the Government making?

CHIEF CABINET SECRETARY SUGA: Given the growing tension in the North Korean situation, yesterday a meeting of director general-level officials from ministries and agencies concerned was convened by the Deputy Chief Cabinet Secretary for Crisis Management. The meeting was for the purpose of sharing information and confirming the crisis management structure in preparation for a contingency situation. Also, today, at my instruction an extraordinary meeting of the Joint Intelligence Council was held from 2:30 to 3:30 pm. Furthermore, in close cooperation with the United States and the Republic of Korea the Government will continue to collect intelligence about this situation and with a due sense of urgency will work to make a crisis response and implement crisis measures to protect the lives and safety of the people of Japan.

(Abridged)