ASAHI SURVEY: 78% of major firms see business conditions improving

June 24, 2013

By AKI FUKUYAMA/ Staff Writer

While nearly 80 percent of Japan’s major companies assess business conditions as improving, an Asahi Shimbun survey shows, that optimism is tempered by comments from some company executives who remain wary of the Bank of Japan's aggressive monetary easing policies.

“Although (the monetary easing) has been simulating consumption by wealthier individuals, spending on basic commodities has not been stimulated,” said Noritoshi Murata, president of retail company Seven & i Holdings Co.

According to the survey, 78 companies said business conditions were either "gradually expanding" or “expanding,” while only two firms gave the same responses in the previous survey conducted in November last year.

The findings are from an interview survey covering the top management of the nation’s major 100 firms, conducted by The Asahi Shimbun from June 3-14. The survey is carried out twice a year.

An increasing number of companies currently think the weakened yen and higher stock prices, triggered by the BOJ's drastic monetary easing measures announced in early April, have improved consumer spending and corporate earnings.

Whereas 94 companies said the economy was “receding,” "gradually receding," or "at a temporary standstill" in the previous survey, no corporations responded similarly in the latest survey.

Many company presidents and chairmen pointed out they are seeing signs of recovery in individual consumption.

“The number of people who are going on trips is rising,” said Takashi Sasaki, chairman of travel agency JTB Corp., during an interview with The Asahi Shimbun.

But some company executives said they doubt the effectiveness of the monetary easing policies of the BOJ and are concerned about the “side effects,” including an increase in import prices.

“We can find a silver lining only in a small part of the real economy,” said Asahi Group Holdings Ltd. President Naoki Izumiya.

Despite recent hopeful signs for the country’s economic recovery, Sekisui House Ltd. President Toshinori Abe said the future of the economy is still unclear.

“There is a risk that interest rates may surge,” the Sekisui House president said.

Meanwhile, most of the surveyed companies said they appreciated Prime Minister Shinzo Abe’s ambitious three-pillar economic recovery plan, known as “Abenomics.”

“In a short period of time, the government has achieved its targets, including higher stock prices and the improvement of business confidence,” said Mitsui & Co. President Masami Iijima.

But some company executives said the government should take further steps to improve the economy.

“If the government does not move forward with fiscal reform, it will cast a pall over the economic recovery,” said Junji Tsuda, president and chairman of Yaskawa Electric Corp.

By AKI FUKUYAMA/ Staff Writer
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In front of stacks of his company's products, the president of a company in Shiga Prefecture that makes plastic materials and bags says on June 14 that the weaker yen has forced his company to face harsher financial conditions, and he has not benefited from the current monetary easing measures of the Bank of Japan. (Masami Horie)

In front of stacks of his company's products, the president of a company in Shiga Prefecture that makes plastic materials and bags says on June 14 that the weaker yen has forced his company to face harsher financial conditions, and he has not benefited from the current monetary easing measures of the Bank of Japan. (Masami Horie)

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  • In front of stacks of his company's products, the president of a company in Shiga Prefecture that makes plastic materials and bags says on June 14 that the weaker yen has forced his company to face harsher financial conditions, and he has not benefited from the current monetary easing measures of the Bank of Japan. (Masami Horie)

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