TOKYO-- Admit it. You like a little drama in your life.
Your friends in Japan are no different. Whether it's a fish-that-got-away story or the latest soap opera, the Japanese are fans of a little tall-tale telling. Every night thousands tune into soaps in which star-crossed -- and meteorologically unfortunate -- lovers tearily solve or dissolve their relationships in the pouring rain that invariably ends each episode.
About the only soap opera the public
tiring of is the endless debate by the government over how much to spend to reignite Japan's economy. Last year the government tossed nearly 40 trillion yen ($377 billion; we could carry out the decimal points, but would it really matter?) to keep the economy from sinking. While all that money worked -- Japan posted a couple of quarters of impressive growth -- the public knows these packages are a compromise of economic necessity and political hardball.
and top bureaucrats will sit down next week to "officially" discuss the scope of an extra budget, although talks have been under way and bits and pieces of the package have meandered into the press with regularity. The important point: How much of the package will be real spending (known by the Japanese as "freshwater spending") and how much will be in soft-yen form, like tax cuts?
Economic Planning Agency
on Friday said as much as 6 trillion yen in freshwater could be poured into the economy and the total package could come to more than 10 trillion yen. And members of the
, junior partners in Obuchi's tripartite coalition, have hinted the final figure could be more.
"With tax revenue down, the government is going to need more money to spend," says
, a fixed income dealer at
, who says freshwater spending could come in even higher at 7 trillion yen.
Kubota's comments, of course, hint at the real rub. Japan's fiscal deficit is busting at the seams and looks to top 100% of gross domestic product. That has Kubota and his brethren bond traders worried that ratings agencies, like
Moody's Investors Service
, may be quick to downgrade Japan's sovereign debt rating -- once a pristine triple A -- yet again. And that will create a nasty confluence of monstrous supply meets tepid demand for sub-AAA rated paper.
Bond traders have more on their minds than burgeoning supply. The
Bank of Japan
meets on Wednesday to discuss monetary policy. They worry that if the central bank adopts an inflation target, something academics and pundits have pressed for, long-term interest rates would begin a natural and understandable climb. How, they wonder, can you keep the economy growing when borrowing costs mount?
Elsewhere in Asia, trading in the Indonesia rupiah will continue rattling the nerves of investors as markets look for newly elected president
to form a new government and announce economic reforms.
Stability for the rupiah, which tanked 500 to 7,450 rupiah to the dollar Wednesday when the popular Megawati Sukarnoputri failed to get the backing of the
People's Consultative Assembly
to take the top post, will come only when Wahid settles an ongoing scandal at
that includes government officials, analysts say.
The scandal, which involves the alleged transfer of $78.7 million into ex-president
presidential campaign coffers, has caught the attention of the
International Monetary Fund
. The IMF says it won't resume a $45 billion aid package until the mess is cleared.
Alleged illegal money transfers. Withholding of international aid. Tanking currency. Sounds like grist for a Japanese television drama.