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2010年7月 3日 (土)

景況感プラス 円高・株安への警戒を怠るな

The Yomiuri Shimbun (Jul. 3, 2010)
Stay vigilant against yen's rise, stock falls
景況感プラス 円高・株安への警戒を怠るな(7月2日付・読売社説)

Although corporate sentiment about business conditions seems to be improving, evidence the economy has regained its vigor remains sketchy at best.

Stock prices have tumbled, the yen has appreciated again, and the nation is still unable to shake off deflation.

The campaign for the July 11 House of Councillors election is well under way. Each party has pledged to attain high economic growth.

However, rather than competing over who can set the highest target, the parties should focus more on how realistic their measures for achieving these goals are.

The first task for the government after the election is to put the economy on track for a full recovery. We hope political parties will engage in reasoned debate on this issue.

The Bank of Japan announced Thursday its Tankan short-term economic survey of enterprises for June. The diffusion index for business confidence among corporations greatly improved. The index now stands at plus 1 among major manufacturers, a vast improvement from minus 14 logged in March. The index has entered positive territory for the first time in two years. It is the fifth straight quarterly improvement, and the index is now almost at the same level as it was just before the so-called Lehman shock of 2008.


Recovery seems steady

The improved performance of exporting companies led the uptick. In addition, major nonmanufacturers, as well as small and midsize manufacturers and nonmanufacturers, also stayed on their recovery path.

Capital investment--which holds the key to a full-scale recovery--for this fiscal year also finally turned positive for major companies. We can safely say the improvement is spreading to the wider economy.

Despite the favorable Tankan figures, the Nikkei Stock Average fell for the second straight day to close at a fresh low for the year. Uncertainty over the strength of the global economy remains and market players seem to be on tenterhooks over the yen's appreciation.

In the United States and Europe, worries linger over aggravated fiscal deterioration and the economic downturn caused by the Greek debt crisis. The Dow Jones industrial average at the New York Stock Exchange has been on a downward spiral and dipped below 10,000 this week.

A downturn in overseas markets increases pressure on the yen to appreciate, which in turn causes stocks in Japan to plunge. This vicious circle has apparently taken root.

Many companies forecast the exchange rate this fiscal year will hover around 90 yen to the dollar. However, the yen this week appreciated to the 88 yen level against the greenback. If the yen rises further, it will knock the stuffing out of export-related businesses that are showing signs of slowing growth.


What's the reality?

The Tankan also showed the bearish sentiment of companies that are not confident the recovery will be sustainable. The diffusion index for automobile companies in the major business category improved greatly, but they forecast a major decline three months down the road. Their sentiment stems partially from the fading effects of government measures to support domestic vehicle sales, such as tax breaks for purchases of eco-cars.

As about 70 percent to 80 percent of companies surveyed for the Tankan submitted their responses to the Bank of Japan by or in early June, the report does not fully incorporate recent worrying developments such as the yen's appreciation and fall in stock prices. All observers will be carefully watching to see if actual business sentiment is more pessimistic than the Tankan indicated.

Including the Democratic Party of Japan, which advocates building a "strong economy" as a central campaign pledge, each political party has promised annual economic growth ranging from 3 percent to 5 percent. We welcome the trend of putting priority on economic growth. However, before anything else, the parties must present prescriptions that will unfailingly bring about an economic recovery and departure from deflation.

(From The Yomiuri Shimbun, July 2, 2010)
(2010年7月2日00時56分  読売新聞)


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