Japan PM orders plan to boost domestic investment

Agence France Presse

Posted at Aug 29 2010 01:47 PM | Updated as of Aug 29 2010 09:47 PM

TOKYO  - Japan's premier has ordered his finance minister to draw up a plan to boost domestic investment and keep jobs at home as a strong yen pressures Japanese firms to move factories abroad, reports said Sunday.

Prime Minister Naoto Kan has instructed Economy, Trade and Industry Minister Masayuki Naoshima to compile "a programme to promote domestic investment" by October.

Kan plans to incorporate part of the blueprint into a fresh stimulus he will outline on Tuesday, the Yomiuri Shimbun and other media reported.

"In order to fix the economy, the first to do is (create) jobs, the second to do is jobs," Kan told reporters Saturday, the Yomiuri said.

The main feature of the plan would be measures to promote domestic investment from some 200 trillion yen ($2.36 trillion)  of cash and deposits kept by Japanese companies, the reports said.

Kan renewed pressure on the central bank to take additional monetary easing measures, reportedly saying: "I'd like to see the Bank of Japan governor as soon as he returns (from a trip to the United States) and mention what we expect them to do."

The reports came as Kan said Friday he would outline measures to counter the effects of the yen's strength this week, implying possible intervention by saying he would take "determined steps when necessary".

The yen this week hit 15-year highs against the dollar, threatening exporters as it erodes repatriated profits, inflicting damage on Japan's key growth driver.

Earlier reports Saturday said the BOJ will likely hold an emergency policy meeting early this week to discuss additional monetary easing.