P.M. BRIEFING : Top Japanese Banker Blames Bush Revised Budget Plan for Dollar’s Fall

Bank of Japan Gov. Satoshi Sumita today blamed President Bush’s revised budget plan for the recent fall in the value of the U.S. dollar.

The government officials said Sumita told a morning Cabinet session he hopes the Bush Administration will implement measures to redress the budget deficit.

“Market disappointment over the revised U.S. federal budget proposal is behind the recent fall in the value of the U.S. dollar against the Japanese yen,” Sumita was quoted as saying.

Bush sent to Congress last week a revised $1.16-trillion budget highlighted by a one-year freeze in real growth of military spending and a cut in the capital gains tax.

He said the federal deficit would be reduced to less than $91.1 billion next year.

Sumita said “stability of the U.S. economy is the basis of stable foreign exchange rates, and we hope the tempo of domestic demand expansion in the U.S. economy will slow down and measures to reduce the budget deficit will be implemented.”