The move runs counter to previous LDP policies that were opposed to worsening Japan's deficit and the use of public funds to rescue financial institutions. Hashimoto also appears to have ignored the powerful bureaucrats in Japan's Finance Ministry, who are even more opposed to deficit-boosting steps like tax cuts. Currency consultant Barbara Rockefeller of Rockefeller Treasury Services doesn't think the individual tax cut will prompt a lot more spending by consumers, since the country will remain a nation of savers. And the business spending, she says, will benefit all of Asia since some of this money will be invested in new factories in other countries. The question now is when and how Hashimoto can actually carry out these plans.
Japan is always slow in putting things into action.
Another question is how Japan will react to the use of public money to bail out the financial industry, a tactic the LDP has only grudgingly accepted. Many Japanese are particularly resentful of helping an industry marred by ties with organized crime. Given an inch, Hashimoto is now taking a mile. She is not the only skeptic. A survey by the daily Asahi Shimbun indicates 56 percent of Japanese oppose the bond issuance and 75 percent are against the rescue of institutions that aren't competitive.