According to a Kyodo News survey, nearly 80% of 107 major Japanese companies polled expect the domestic economy to weaken in the near future, though 70% see it as expanding at present.
The survey showed that concern about economic trends in the United States, Europe and China, and the appreciation of the yen are among factors blamed for the gloomy near term outlook for economic activity in Japan.
Kyodo polled top executives at 107 leading Japanese companies, including Canon Inc, Nintendo Co, Nippon Steel Corp, Nomura Holdings Inc, Mitsubishi UFJ Financial Group Inc, Sony Corp and Toyota Motor Corp, between late July 2010 and early August 2010. In the survey, 74 companies said the Japanese economy is gradually expanding while one saw it as expanding.
The finding testifies to a considerable improvement in business sentiment as 31 of the 109 companies covered in the previous survey at the end of 2009 said the economy was gradually expanding.
To a multiple response question about factors underpinning the domestic economy, 87 companies referred to the growth of China and other emerging economies, and 66 noted government programs to stimulate personal consumption such as the eco point system to promote environmentally friendly products.
But 84 companies were concerned about a possible slowdown in domestic economic activity in the near future, including two that voiced grave concern.
Asked when they expect the economy to begin slowing down, 28 companies said the October to December quarter of 2010 and 25 said the January to March quarter of 2011. Among reasons for concern, overseas economic trends were cited by a large number of respondents, with 47 companies pointing to trends in the United States, 43 to those in Europe and 36 to those in China and other emerging economies.
In addition, 44 companies cited the yen's appreciation while 34 said stimulus measures will run out of steam. The survey also found that a total of 52 companies supported a hike in the consumption tax rate to 10% or higher from the current 5%, including 16 that favored a rise to 15%. Two companies said the rate should not be raised.
(Sourced from Kyodo News)
