Japan: back to basics

Article Abstract:

Japanese economic growth has recovered in 1996, and Merrill Lynch forecasts a 3.5% rise in gross domestic product. The Japanese yen looks unlikely to become significantly stronger in relation to the US dollar, and banks are tackling their bad debt problems. The Nikkei 225 index has reached the highest point for four years and most shares purchased by Japanese investors in the bubble economy period appear to have been sold. A major wave of selling is not expected until the index has risen further.

Economic aspects

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Japan: waiting on the bail-out

Article Abstract:

Japanese share prices could be affected by a delay in parliament over agreement for the budget for 1996 to 1997. This is due to the opposition parties' reluctance to back a plan to help financial institutions using public funds. Japanese share prices would also be affected by a repatriation of funds to the US, since US investors have been a major force in a rally for Japanese shares from Jul 1995. US Treasury yields would also be affected by a withdrawal of Japanese investment.

Economic policy

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