(CEP News) - The Yen is mixed on Friday after the ruling political party in Japan proposed legislation allowing the government to buy stock if conditions deteriorate to certain levels in the country.

The party has proposed legislation to buy stocks if shares fall to unreasonable levels. If accepted, law would remain in place through 2012.

On Friday, Bank of Japan Governor Masaaki Shirakawa met with European Central Bank President Jean-Claude Trichet to discuss the global financial markets and the economy.

In at a press conference, Shirakawa said the declines in Japanese exports should ease but that consumer spending and capital investment will continue to deteriorate further. Nevertheless, the worse may have passed for Japan.

Japanese Finance Minister Kaoru Yosano told reporters that it will be difficult for government to balance its budget by fiscal 2011, and may need to set another “milestone”.

The Japanese government’s monthly report says that the economy is in a “severe state.” Nevertheless the report upgrades its evaluation of exports and public works, and downgrades its view on business sentiment in the country.

In equities, Asian markets closed higher, with the Japanese Nikkei finishing the day up 152 points to 8908 and the Hang Seng Index up 18 points to 15601.

All data taken at 7:58 a.m. EDT,

USD/Yen up 0.01 points to 99.29

Euro/Yen down 1.23 points to 129.68

CAD/Yen down 0.34 points to 81.91

By Erik Kevin Franco, efranco@economicnews.ca; edited by Nick Say, nsay@economicnews.ca

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Posted in Categories: Canada, Economy, Eurozone, Forex, Japan, Releases, USA.

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