Prime Minister Ryutaro Hashimoto instructed the Liberal Democratic Party on Thursday to consider using public funds to clear up the nation's bad loan mess, a proposal welcomed by a rally on the Tokyo Stock Exchange.
The 225-Issue Nikkei average closed the day at 16,308.49, up 466.03 from Wednesday. Hashimoto instructed LDP Secretary General Koichi Kato to head discussions within the party on problems relating to bad loans incurred by financial institutions, Chief Cabinet Secretary Kanezo Muraoka said.
Spending public money had been considered taboo following the debacle over the failure of the "jusen" mortgage lenders last year. Hashimoto's move came after former Prime Minister Kiichi Miyazawa advised him to consider using public money to bail out private banks and brokerages to avert a financial crisis, Muraoka told reporters during a regular news conference.