Restructuring boosts equities

Article Abstract:

Japanese stock prices have been boosted by corporate restructuring, productivity improvements, and signs that the economy is recovering. Economic growth is forecast at 1% annually by Merrill Lynch, and this should help corporate profits. Business confidence has also improved, according to the Bank of Japan's survey for Jun 1999. Inventories are also contracting for finished products. Restructuring is also reflected in high unemployment and a drop in incomes and capital spending, but this should be interpreted as encouraging.

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From bad to worse

Article Abstract:

The Tankan survey of Japanese business conditions, carried out by the Bank of Japan, is pessimistic in 1997. This could affect stock prices, and the government is likely to seek to stimulate the economy. Long bonds have dropped to a record low, and there is concern that bad debt problems and corporate bankruptcies could increase. The US is putting pressure on Japan to try to increase domestic demand. The Tankan report could act as a stimulus, though conditions could worsen before they improve.

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Time for the sun to finally shine

Article Abstract:

The Japanese stock market peaked in 1989 and has yet to reach its 1991 level in 1997 let alone the level seen in 1989. Investors have often been told that the market is recovering, only to be disappointed, but a recovery could be under way, backed by positive economic fundamentals. Earnings are rising, consumer spending looks positive and interest rates are low. Investors seeking a long-term view could consider funds specialising in Japan.

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