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70% of Japanese business leaders predict moderate economic recovery

  • News Desk

    The Japan News/Asia News Network

Tokyo, Japan   /   Fri, January 4, 2019   /   09:09 am
70% of Japanese business leaders predict moderate economic recovery Employees in Japanese traditional Kimonos pose during the Tokyo Stock Exchange's new year business ceremony in Tokyo on January 4, 2019. (AFP/Toshifumi Kitamura)

More than 70 percent of Japanese business leaders said that business conditions are currently recovering moderately or would recover moderately over the next six months, according to a survey by The Yomiuri Shimbun conducted on 30 top executives at leading Japanese companies.

However, regarding points of concern for their company (with multiple answers allowed), 16 executives cited trade conflict between the United States and China, showing fears are increasing over the effects of sanctions and punitive tariffs between the two countries.

The survey was conducted in December via direct interviews or paper questionnaires.

Regarding the current state of the economy, 22 said it is experiencing moderate recovery, while eight said it has stagnated. Twenty-three said it would recover moderately in the future, while seven said it has leveled off. For the time being, many are predicting that the current recovery trend will continue.

Regarding areas of concern, in addition to U.S.-China trade friction, 12 people cited currency fluctuations, showing apprehension over the yen exchange rate that directly impacts the profits of exporting companies.

In addition, a majority of executives (26) said an increase in the consumption tax rate to 10 percent scheduled for October should take place as planned.

Meanwhile, 21 predicted that the Nikkei Stock Average this year would peak somewhere between 24,000 and 25,000. Twelve, or the highest number of respondents, said the Nikkei’s lowest value would be 21,000, while 10 said it would fall below 20,000 — a forecast apparently affected by the drop in stock prices at the end of last year.

The Yomiuri Shimbun also conducted a survey on top executives of 12 companies in the Tohoku region — two from each prefecture — to coincide with the opening of its Tohoku headquarters in November.

Among them, seven said the economy is currently stagnant — showing a majority in the region feel business has hit a rough patch — while five said it is moderately recovering.

Six said the economy would stagnate over the next six months, and one said it would moderately deteriorate. The Tohoku survey reveals widespread caution over the economy, with only five predicting moderate recovery.