Japan LDP to compile wealth fund proposals in May

TOKYO, April 22 (Reuters) - A Japanese ruling party panel plans to compile proposals next month on creating a sovereign wealth fund aimed at more effectively manage government assets including part of foreign reserves, a party lawmaker said on Tuesday.

Kotaro Tamura, a key member of the Liberal Democratic Party panel studying the creation of such a fund, told a seminar that such an investment vehicle could manage some of Japan's foreign reserves, public pension funds, government-owned property and resources.

Sovereign wealth funds from Asia and the Middle East have become more influential in financial markets after pouring billions of dollars into big banks on Wall Street and Europe that were reeling from losses related to the U.S. mortgage market. [ID:nN20388254]

The LDP panel has only just begun debating the creation of the investment body since early this year. [ID:nT90340]

It originally planned to submit proposals to the prime minister this month, but Tamura said it had been delayed due to other political events.

"The most important thing is timing. We are trying to do this quickly," Tamura said, adding that a wealth fund, if created in Japan, should take advantage of recent declines in financial markets and asset prices so that its investment could gain more profits when the markets recover.

The panel plans to submit proposals to the prime minister in mid-May and it wants to submit relevant bills to parliament in September after getting approval from the premier.

If parliament passes those bills, the fund could be set up as early as next March, Tamura said.

But that may not be as easy as Tamura hopes.