FACTBOX-Quotes from Fujii, Japan's new finance minister

Wed Sep 16, 2009 11:55am EDT

TOKYO, Sept 17 (Reuters) - New Japanese Prime Minister Yukio Hatoyama has chosen Hirohisa Fujii as finance minister, with the new minister quickly boosting the yen by making comments accepting a recent strengthening of the currency against a sliding dollar.

Following are quotes from Fujii, 77, both before and after his Democratic Party won power in an Aug. 30 election:

FOREX

-- "I don't think they are fluctuating rapidly now," Fujii told reporters in parliament Sept. 16 when asked about the speed of recent moves in currencies.

"I'm against intervention if their moves are gradual, and we can't conduct intervention because the current foreign exchange markets won't move without a joint intervention.

"But I can't think other countries will conduct joint intervention even though the yen rises slightly."

-- On Sept 3: "Basically, a strong yen is good for Japan."

"As long as the dollar is strong, reducing (Japan's dollar holdings) would be contrary to the nation's interests.

"Under the current situation, it is unlikely that we will change the reserves (management policy).

"The phenomenon of deflation has been caused by various factors. You can't expect to push up prices by cutting interest rates.

"The policy rate is appropriate at 0.1 percent."

-- On July 16: "Currency rates should not be moved artificially as they reflect the economy's strength. If Japan's economy is strong so is the yen, and if it's weaker than the U.S. economy the dollar will strengthen. It's quite natural.

"Unless currency moves are abnormal, I don't think we should intervene in currency markets."

"It is a fact that confidence in the dollar is still high and it is quite natural for Japan to manage its reserves with what is trusted most (by the markets).

"The weighting of the dollar in the reserves is one such issue that should not be changed just because a change of government happens."

BONDS/FISCAL POLICY

-- "It is not possible to restore fiscal health by sacrificing the people's livelihoods," Fujii told a news conference early on Sept. 17. "Fiscal conditions will improve if the economy is restored."

Fujii also said that setting targets for restoring Japan's fiscal health was a key task for a new National Strategy Bureau that will oversee the budget and set policy priorities, but he didn't set a timeframe for such targets. "That is a big task for the National Strategy Bureau. It is strategy, so it must be considered long-term."

-- "The Finance Ministry is responsible for drafting thr detailed budget. The National Strategy Bureau will decide the direction of the country from a long-term perspective," Fujii said (Mainichi newspaper Sept. 16.) The Democrats will create the National Strategy Bureau to determine the broad framework for national budgets.

-- Fujii said on on TV Asahi on Sept. 13 that he wouldn't rule out issuing more government bonds to support the economy.

-- Fujii said on Sept. 3 the new government should cut planned new issuance of Japanese government bonds (JGBs) in the year to March 2010 by over 1 trillion yen by revising an extra budget issued by the former government to fund stimulus spending.

The outgoing government had planned a record 44 trillion yen ($477 billion) in JGB issuance this fiscal year.

-- He said on July 16 the Democratic Party would cut what it considers wasteful spending in Tokyo's $160 billion stimulus plans, which he said includes spending on construction projects, to reduce new bond issuance.

"The extra budget is a fake," he said, referring to the budget for the year to March 31, compiled under the previous government.

"It is important to cut more than 10 percent of new government bond issuance (of about 10.8 trillion yen planned in the extra budget for 2009/10). This is important for both Japan's fiscal health and JGB markets."