VZCZCXRO7389
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #0156 0220254
ZNR UUUUU ZZH
P 220254Z JAN 08
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 1123
RUEKJCS/SECDEF WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA PRIORITY
RHHMUNA/HQ USPACOM HONOLULU HI PRIORITY
RHHMHBA/COMPACFLT PEARL HARBOR HI//N541// PRIORITY
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA// PRIORITY
RUHBANB/OKINAWA FLD OFC US FORCES JAPAN CP BUTLER JA PRIORITY
RHMFIUU/USFJ PRIORITY
INFO RUEHFK/AMCONSUL FUKUOKA 5607
RUEHNH/AMCONSUL NAHA 8001
RUEHNAG/AMCONSUL NAGOYA 4271
RUEHKSO/AMCONSUL SAPPORO 6213
RUEHOK/AMCONSUL OSAKA KOBE 9272
RUEHBJ/AMEMBASSY BEIJING 1214
RUEHMO/AMEMBASSY MOSCOW 2076
RUEHUL/AMEMBASSY SEOUL 7281
RUCNDT/USMISSION USUN NEW YORK 7927
RHEHAAA/NSC WASHDC
UNCLAS TOKYO 000156
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 - INTERNATIONAL EFFECTS
OF U.S. ECONOMIC SLOWDOWN
1. LEAD STORIES: Lead items in Tuesday morning papers
included the plunge in Tokyo share prices during
Monday's trading.
2. "U.S. Pump-Priming Measures Not Enough to Break
Vicious Circle" The liberal Mainichi editorialized
(1/22): "The U.S. economic slowdown has become more
pronounced, and the possibility of a recession has
emerged. The Bush administration has announced an
economic stimulus package worth one percent of GDP, or
$140 billion to $150 billion. While details will be
worked out through consultations with Congress, tax
cuts for individuals and corporations will be a key
feature in the package, with a $1,600 check likely to
be sent to each household. The financial market has
been critical of these pump-priming measures, because
they lack specifics concerning how to deal with the
subprime loan crisis, the top issue facing the U.S.
economy.... In addition to fiscal spending, the U.S. is
moving toward cutting interest rates. Lower interest
rates would help financial institutions saddled with
nonperforming loans by decreasing their operation
costs. It is uncertain, however, that these measures
will help jumpstart the U.S economy. After all, the
critical issue of subprime loans must be addressed
first. To that end, the Bush administration needs to
swiftly take action, including the injection of public
funds."
3. "How to Deal with U.S. Economic Slowdown" The
business-oriented Nikkei stressed (1/20): "While
economic stimulus measures in the U.S. are welcomed, it
remains to be seen whether those steps can reinforce
the U.S. economy, which appears to be slowing down
across the board, including employment, consumption,
and corporate earnings. The Bush administration and the
Federal Reserve Bank are being called on to do their
utmost in order to avoid a situation similar to what
happened when the Japanese economy plunged into crisis
due to bank failures in 1997. For the Japanese, this is
not someone else's problem, and it is regrettable that
the Fukuda cabinet appears unconcerned about America's
economic woes."
SCHIEFFER