On March 14th, the Fitch credit agency gave 19 banks a negative rating, even though they said that long-term the banks are probably stable because of the government's support. The new addition of liquidity to the economy is a constructive move, but one of Japan's weaknesses has been their big-government approach to solving problems. Japan's leaders have been pummeling this economy with a series of one-two punches. Then, they whine about the large public deficits and say that they will have to raise taxes. These large public spending programs never work, they only rob capital from the private sector.
Japan needs incentive.
The government plan won't force small and regional banks to write off their bad loans. Those banks are the biggest lenders to small and medium-sized companies outside the main cities, which are among the ruling Liberal Democratic Party's biggest contributors and supporters. April 6, 2001. Yen traders see some positive signs for the Japanese currency. The Japanese financial year ends this weekend.