: Prices of Gold, Silver, Platinum and Palladium are all on the
: rise today; not sure why:

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Japan's finances 'near collapse,' official says

TOKYO
(March 8, 2001 1:57 p.m. EST ) - Japan's finances are "near collapse," the nation's finance minister said Thursday, a comment that sent shudders through currency markets as other economic officials tried to play it down.

"He tried to say that current fiscal conditions remain severe. His comments today are in line with his previous stance," Finance Minister Kiichi Miyazawa's top deputy, Toshiro Mutoh, said.

Analysts interpreted Miyazawa's remark in Parliament as an attempt to bring a sense of urgency to efforts to pare down the huge government debt, rather than a warning of imminent financial ruin.

"Miyazawa's saying, 'Look, we can't spend ourselves out of trouble anymore"' said bond strategist Neale Vincent at Credit Suisse First Boston.

But the minister's unusually blunt language played havoc with currency markets, sending the dollar up 0.72 yen to 119.96 yen by the end of trading in Tokyo on Thursday.

Miyazawa did not elaborate on his comment in Parliament that "Japan's public finances are very near collapsing."

That made it difficult to tell if he was saying Japan risks defaulting on its debts or if he was only using forceful words to call attention to the government's increasingly acute fiscal woes.

His proposed solution to the problem was even more vague.

"We need fundamental fiscal restructuring aimed at rebuilding our finances in the 21st century, looking 10, 20 years into the future," Miyazawa said.

"Not only measures to deal with reducing debt, but those to deal with taxes, local government finances and social security will be needed," He added that a government council on fiscal and economic policy is looking at ways to dig the government out of debt.

Japan's public debt stands at more than $5.4 trillion, equivalent to 130 percent of gross domestic product - the worst debt-to-GDP ratio in the industrialized world.

Analysts and many politicians have long warned that profligate spending to prop up the economy was unsustainable.

But economic planners insisted that injections of funds were needed to boost the economy out of more than a decade of gloom.

Just weeks ago, U.S. credit rating agency Standard & Poor's downgraded Japan's debt rating from its top-notch status.

At the time, Miyazawa criticized S&P's decision and said he had "absolutely no intention" of changing fiscal policy because of it.

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