Not sure about tomorrow..Trend is of course down...But again sharp reversal is likely around $282-285 levels..plus yen behavior should be a determining factor of dollar direction in weeks to come..
Japan's EPA Optimistic on Economy
Monday, 15 March 1999
T O K Y O (AP)
THOUGH STILL mired in a severe slump, Japan's economy is close to
bottoming out - largely as a result of government support measures, the
Economic Planning Agency said Tuesday.
In its March report on the economy, the EPA described overall conditions
as "extremely severe," but said the economy's "downward movement
continues to slow to a halt."
"This is a big change," said Takashi Omori, director of the national
economic division at the agency's research bureau.
The official optimism comes just days after the EPA announced Japan's
economy shrank for an unprecedented fifth straight quarter in the last three
months of 1998, confirming the country remains in its worst recession in 50
years.
Despite the severity of the gross domestic product data, the optimism of
Tuesday's report was in line with growing notions among many officials and
investors that the worst of Japan's economic malaise may be over.
The EPA was joined Tuesday by the Bank of Japan, which also slightly
upgraded its assessment of the Japanese economy in a monthly report,
saying it "appears to have stopped deteriorating."
The BOJ, however, said consumer sentiment remained cautious and
corporate capital expenditures are expected to continue falling in the near
term.
"It is still difficult to expect an immediate, self-sustained recovery in private
demand," the central bank said.
One sign has been a recent jump in stock prices. With its close Monday at
15,779.60, the benchmark Nikkei stock index has risen by about 1,600
points in little more than a week, partly due to budding optimism.
In addition to rising public works outlays resulting from fiscal stimulus
packages, which the EPA said have made public investment "solid,"
government efforts to lower both long- and short-term interest rates have
been successful, the report said.
Nonetheless, the EPA's report Tuesday was cautious, generally balancing
every optimistic sign with a dose of pessimism.
"Although some areas are bottoming out, we must watch cautiously before
we can say that the economic situation will get better from now," Omori
said.
The EPA said personal consumption has almost stopped declining but
remains weak due to "sluggish" income. Because many companies have
recently cut back on overtime hours and reduced bonus payments,
disposable income has fallen in recent months.
In addition to a weak wage outlook, the employment situation remains
severe, the EPA said. Despite signs that the recent decline in the number of
employed workers may be leveling off, the jobless rate remains at a
record-high 4.4 percent.
The EPA also noted that corporate bankruptcies are sharply down,
reflecting the effects of a government-backed loan guarantee system for
small- and medium-sized companies.
Corporate bankruptcies fell to 955 in February, down 40 percent from a
year earlier and 5 percent lower from January. It was the first time in more
than six years that the number fell below 1,000, according to private credit
research agency Teikoku Databank Ltd. |
