Restoration after quake disaster could create 'New Deal' demand: Kan

Prime Minister Naoto Kan said Sunday the catastrophic earthquake that struck Japan could help create huge demand in its economy in the process of reconstruction, urging people not to be "pessimistic."

"It is sufficiently possible to expect demand that should be called a restoration New Deal," Kan told a meeting of economic ministers at his office, referring to a series of economic programs implemented in the United States in the 1930s.

The premier also said that Japan will try to prevent disruptions in financial markets in the country, which will open Monday morning for the first time after the quake. "It is necessary to adamantly fight any speculative moves," he stressed.

Economic and fiscal policy minister Kaoru Yosano said after the meeting that Tokyo will adopt "strict" measures against any moves to manipulate stock prices.

Japan will double efforts to regulate "naked short selling" by investors who sell shares that they did not previously borrow or make arrangements to borrow, Yosano said.

Finance Minister Yoshihiko Noda told the meeting that he will closely monitor currency markets as well as long-term interest rates, according to Yosano.

"The core of Japanese industries remains undestroyed" by the earthquake, Yosano said, while adding that the negative impact from the government's decision to limit electricity supplies in part of the country, starting Monday, would be "controllable."

He also said the government will seek closer cooperation with the Bank of Japan in an attempt to block negative impact from the quake, which destroyed vast areas of northeastern Japan.

"We will collaborate more closely than usual," the minister told reporters, underlining that he believes the central bank will "undertake monetary policy both conventional and unconventional" to help the government ease tensions surrounding the economy.


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