Commentary: Japan's Finances Need Shaking Out Not Propping Up

First, Tokyo officialdom dissembles for most of a decade about the scale of the post-bubble mess. Then, with the collapse of four banking and brokerage institutions last month, the ruling Liberal Democratic Party starts to straighten up. Well, yes, say the party's front men, there might be a problem after all. Now, a hastily assembled LDP task force is about to approve a plan to raise $77 billion from government bond sales to prevent a full-blown financial panic. So, has Japan's crisis come mercifully to an end?

Don't count on it. True, the figure is headline material. And investors turned euphoric on Dec. 9, after Prime Minister Ryutaro Hashimoto backed the big commitment: The Nikkei jumped 3.5%. Having taxed the nation into fresh recession earlier this year, Hashimoto has--for now, anyway--wisely dropped his fixation with cutting Japan's huge budget deficit. With popular support dwindling, he has little choice.