TOKYO, Oct 12: Japan may take measures in an extra budget in January to boost help for the unemployed to offset an expected radical bank reform plan, a spokesman for the country’s ruling party said on Saturday.

If we are going to put one together, it will come at the start of next year’s regular Diet session (in January), Taku Yamasaki, secretary general of the ruling Liberal Democratic Party told a party seminar in northern Sapporo.

It will not vary from our basic policy on reforming government finances and will focus on safety net issues, with measures for employment and small- and medium-sized companies included, he said.

It will not come in time for the extraordinary Diet session (set to open next Friday), said Yamasaki in remarks broadcast on Japan Broadcasting Corp. (NHK).

It was not clear if the extra budget would scuttle Prime Minister Junichiro Koizumi’s vow to keep issuance of new debt at 30 trillion yen (242 billion dollars) in the year to March 2003.

Japanese politicians have been at pains recently to tone down comments by the new chief banking regulator Heizo Takenaka, who has vowed to accelerate disposal of bad loans at banks no matter the pain to companies whose credit lines would be cut in the process.

Koizumi, on Saturday stumping in Chiba prefecture adjacent to Tokyo ahead of by-elections later in the month, said: We have to promote bold and flexible measures that the people need.

During the week just ended, the Nikkei-225 index on the Tokyo Stock Exchange lost 497.94 points or 5.5 per cent to 8,529.61, hovering near the latest 19-year-low hit on Thursday as investors nervously awaited the outline of Japan’s anti-deflation package.

Takenaka has formed a team of reformers and pledged to rid Japan of its bad loan problem, conservatively estimated to be worth some $350 billion, by March 2005.

He has said he would unveil the government’s plan for doing so before the end of the month. —AFP