SEPTEMBER 4, 2009, 3:28 A.M. ET
UPDATE: DPJ Hatoyama Says Need Balance Between
(Adds more details from speech and background.)
By Kenneth McCallum
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--Japan's incoming prime minister said Friday that a balance needs to be struck
between free competition in markets and government regulation, indicating that his administration might
seek more government oversight over financial markets.
"There used to the naive idea that if we rely on markets, everyone will become happy. We now recognize
that view as problematic," said Democratic Party of Japan President Yukio Hatoyama, who is slated to
become the next Japanese prime minister on Sep. 16 after his party's landslide victory in a general election
"There needs to be a balance between the market and government," he said in a speech at a World
Economic Forum conference.
Hatoyama's left-of-center government is likely to move away from some of the big business-friendly policies
of the current Liberal Democratic Party administration. Its campaign pledges have called for several
measures that could hit the bottom line of large firms, including stricter carbon emissions reduction goals, a
ban on hiring temp workers by manufacturers, and an increase in the minimum wage. Hatoyama's latest
remarks indicate that the activity of major market players could also come under more scrutiny when the
new government takes over.
He said the worst excesses of so-called market fundamentalism have tended to appear in financial markets,
as seen for example in Japan's asset bubble in the 1980's, the collapse of which led to a decade-long
stagnancy in the world's second largest economy.
Last month, Hatoyama wrote in an article published in The New York Times that the Japanese economy has
been buffeted by "U.S.-led market fundamentalism", and that Japan should try to put an end to
"unrestrained financial capitalism."
Meanwhile, Hatoyma cautioned against protectionism during a period of weak economic growth globally,