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To: Bonnie Bear who wrote (18403)	2/6/1999 11:54:00 PM
From: wlheatmoon	Respond to of 86076

The Japanese Economy May Be Headed For A Hard Landing JEFF YASTINE: Well, for years, Japan has been trying to find ways to kick- start its economy, while avoiding the problems that usually come along with it, like huge layoffs. Now, some analysts say the country is running out of options and its economy could be headed toward a hard landing. Lucy Craft reports from Tokyo. LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: Unemployment and bankruptcies are at record highs. Even Japan's blue chip companies are staggering, and the Tokyo Stock Market has dwindled to a third of its peak value. Get ready, some economists say, for a hard landing. Large scale bankruptcies and a sharp rise in joblessness that could strike as early as this year. BRIAN ROSE, SENIOR ECONOMIST, WARBURG DILLON READ: The Japanese economy basically heading for a cliff. Everyone sees it. Everyone knows that disaster is right in front of us. But, you know, the driver is asleep at the wheel. There is no one to change course. CRAFT: Possible triggers are many. Another major firm goes under, collapse of the bond or stock markets, or a surge in the yen, already strong because of the expanding and politically sensitive current account surplus. MICHAEL NALDRETT, ECONOMIST, DRESDNER KLEINWORT BENSON: If you get a rise in the yen, you'll only see takeaway growth through the overseas sector. And at the same time, the Americans are very happy over the rising bilateral surplus. So to push on two or three years, the continuation I think is unlikely. And I think there would be a crisis before you got to that point. CRAFT: Japan offers only meager unemployment benefits making it more vulnerable to a hard landing. Observers say layoffs could be as severe as in the U.S. and other western countries. ROSE: A hard landing would presumably mean that a lot of the companies which are, in fact, insolvent actually go bust, and that a lot of people who are so- called "in-house unemployed"-they are not really working, but the company is holding onto them-those people will become actually unemployed. And you'll see GDP contracting at a much more rapid pace. CRAFT: Analysts disagree about whether 1999 will actually be Japan's year of reckoning. But there is a growing consensus among observers that a hard landing is actually necessary, the only way to force Japan to thoroughly restructure. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo. Nightly Business Report transcripts are available on-line post-broadcast. The program is transcribed by FDCH. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. (c)1999 Community Television Foundation of South Florida, Inc. --------------------------------------------------------------------------------