Cablegate: Tokyo Media Reaction - U.S. Economy

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UNCLAS TOKYO 000757

SIPDIS

SIPDIS

STATE FOR I/RF, PA/PR/FPC/W, IIP/G/EA, EAP/PD, R/MR,
EAP/J, EAP/P, PM;
USTR FOR PUBLIC AFFAIRS OFFICE;
TREASURY FOR OASIA/IMI;
SECDEF FOR OASD/PA;
CP BUTLER OKINAWA FOR AREA FIELD OFFICE;
PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO JA
SUBJECT: TOKYO MEDIA REACTION - U.S. ECONOMY

1. LEAD STORIES: Top stories on Thursday morning
included the Upper House rejection on Wednesday of the
second GOJ nominee for Bank of Japan governor.

2. "U.S. Economic Management Dependent on Rate Cuts"
The business-oriented Nikkei editorialized (3/20): "The
U.S. appears to be taking full-scale money-easing
measures to cope with the economic slowdown and
financial confusion there.... While concern about
inflation remains, the U.S. continues to be dependent
on the Federal Reserve Board in dealing with the
economy.... The effect of an additional rate cut may be
limited, as it may not be able to supply enough funds
to the financial institutions that are facing credit
uncertainty. The recent rescue of Bear Stearns by both
the government and private sector demonstrates the
seriousness of the financial crisis.... The U.S. may be
forced to inject public funds into financial
institutions to deal with the subprime mortgage
problem, which is the source of the trouble."

SCHIEFFER

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