JAPAN: U.S. Treasury Secretary Paulson praises Japan's recent economic performance

U.S. Treasury Secretary Henry Paulson praises Japan's recent economic performance Tuesday (March 6) on the first leg of his three-nation trip. U.S. Treasury Secretary Henry Paulson praised Japan's recent economic performance Tuesday (March 6) as he visited Japan's top finance officials, including the Tokyo Stock Exchange president and the Bank of Japan governor. "It's very, very meaningful to me, the Japanese economy is doing so well, " he told Tokyo Stock Exchange President Taizo Nishimuro in Tokyo. " This is the second largest economy in the world It's very meaningful not only to Japan but to the U.S. and all the major trading partners and everyone else in the global system that Japan is doing so well." The U.S. Treasury chief was on the first leg of a three-country trip that will also take him to South Korea and China before he returns to Washington on Thursday (March 8). Paulson described global economic conditions as very healthy and the markets recovered from recent drops in global equity prices. On Tuesday the yen rose to a three-month high against the dollar and surged against the euro as a slump in Asian and European stocks prompted investors to unload trades funded by borrowing in the Japanese currency. The yen strengthened against most major currencies, climbing to its highest against sterling since October, as investors continued to reduce carry trades, in which they borrow in low-yielding currencies to invest elsewhere. Tokyo stocks posted their biggest one-day fall in nine months on Tuesday while Chinese stocks, which triggered a global sell-off last week, dropped as much as four per cent. In Europe, shares were down around 1.5 per cent. Earlier in the day, Paulson discussed the global economy with Bank of Japan Governor Toshihiko Fukui. On Monday (March 5), Paul held a meeting with Japanese Finance Minister Koji Omi in which the two top officials of the world's first and second largest economies agreed that both Japanese and U.S. economies are firm, while Paulson reiterated that the yen's value should be decided by markets. Global equity markets have been recently affected by several factors, including the Chinese stock market's sharp drop last week and a comment by former Federal Reserve Chairman Alan Greenspan that a recession was possible.

ITN Source | March 6, 2007

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