950803

Japan says new

package good for

developing states

JAKARTA: Japan's Minister of International Trade and Industry Ryutaro Hashimoto said on Thursday his country's new package to promote overseas investment was attractive to developing and debtor countries.

"The objective of the measures is to promote overseas investment and loans by Japan, but I am sure this is very happy news for the debtor countries as well," Hashimoto told reporters after meeting President Suharto.

Tokyo on Wednesday unveiled a series of measures aimed at correcting the yen's rise by promoting Japanese investment overseas.

Hashimoto said the package was not specifically targeted at countries which had a debt problem, but could be used effectively by developing countries.

"That was (the) underlined thinking when we came to announce this package," he said.

Hashimoto said the U.S. dollar had surged on news of the fresh measures, rising above a key resistance point of 89 yen in morning trade on Wednesday. The dollar was moving in the mid-90 range on Thursday afternoon after opening at 91.13/18 yen.

Industry Minister Tunky Ariwibowo told reporters he welcomed the package and hoped Japanese investors would look to Indonesia.

Statistics from Indonesia's Investment Coordinating Board show Japan as the country's biggest foreign investor in the last 28 years. Since 1967, Japan has invested US$18.6 billion, or 20.2 percent of all foreign investment in Indonesia.

Indonesia has suffered from the appreciating yen as about 40 percent of its $100 billion foreign debt is denominated in yen.

The yen's recent rise has dented corporate profits and added to fears that Japan's sluggish economy may slip back into recession.

Among the measures announced by Finance Minister Masayoshi Takemura on Wednesday were the removal of limits on insurance companies' participation in syndicated loans and on their foreign currency loans.

Japan's largest life insurer, Nippon Life Insurance, warmly welcomed the moves and said they would contribute to a correction of the yen's rise.

Hashimoto said he and Suharto also discussed preparations for the Asia Pacific Economic Cooperation forum meeting in Osaka in November.-Reuter