'Mr. Yen' Sees More Trouble in Tokyo's Economic Future Thomas Crampton International Herald Tribune Monday, April 2, 2001 TOKYO Despite recent government attempts to put a positive spin on Japan's economic outlook, the world's second-largest economy could face a painful "double-dip" recession, Eisuke Sakakibara, a senior economist, warned over the weekend.

Known as "Mr. Yen" by the foreign-exchange dealers over whom he held legendary sway until his retirement from the post of deputy minister of finance less than two years ago, Mr. Sakakibara remains plugged into financial markets and their players as director of the Keio University Global Security Research Center.

The U.S. economy has further to slow, European confidence is sputtering and there is a 40 percent to 50 percent chance of a world recession, Mr. Sakakibara said.

"I was on Wall Street about a week ago and even those who are optimistic are not certain," he said in an interview with The International Herald Tribune. "The U.S. economy is still in the first phase of a slowdown."

As for the Japanese economy, Mr. Sakakibara said he remained pessimistic in the short term.

"I don't think the Japanese economy has turned around, and I think there is a possibility the economy will get into a double-dip recession," he said.

While Japan's January-to-March growth rate stood at near zero, Mr. Sakakibara said there was a strong possibility that the April-to-June period could plunge into negative territory by a large margin.

"Confidence has been deteriorating, corporate profits are expected to decline," Mr. Sakakibara said. "All the structural problems that plagued the Japanese economy are still there."

These statements strongly contrast recent comments by Mr. Sakakibara's successor as vice minister of finance, Haruhiko Kuroda.

"I very much respect Mr. Kuroda, but his comments are restrained by his position," Mr. Sakakibara said. "I know very well that as vice minister of finance you must be an optimist."

The prevailing sentiment of Japanese business executives will be discernible on Monday with the release of the influential tankan survey of corporate sentiment.

While the survey is expected to bring more negative news, some analysts are hopeful, citing a series of tax and accounting changes that took effect with the start of the fiscal year Sunday and a package of emergency measures to be announced Wednesday.

No changes have been significant enough yet, Mr. Sakakibara said, but he added that Japan's longer-term recovery should come out of the short-term hardship he expects.

"I am optimistic for Japan in the medium and long term," Mr. Sakakibara said. "We are about to enter a period of confusion, out of which major structural changes in the economic and political sphere will take place."

Political change means a more fundamental shift than the expected departure of the now highly unpopular prime minister, Yoshiro Mori, he said.

"A change of puppet means nothing," Mr. Sakakibara said. "You must also change the puppeteers."

Fundamental political changes are beginning to take place with the recent electoral victories of candidates who are not associated with the governing Liberal Democratic Party or the opposition, Mr. Sakakibara said. The trend will probably be re-enforced by the upcoming election for Tokyo's parliamentary representative in April and the upper house elections in July, he added.

"Change has started at a local level," Mr. Sakakibara said. "Policies will begin to be affected on a national level sometime toward the end of this year."

The main change that must take place is a re-engineering of Japan's domestic old-style economy, Mr. Sakakibara said.

"Everyone knows our very progressive export-oriented companies like Sony, Toyota and so on," Mr. Sakakibara said. "The real changes need to take place in the domestic distribution and manufacturing sectors like construction, food processing, agriculture and fishing."

Changes in the domestic economy, supported by a sea of subsidies and protected by regulations, will mean a great deal of pain, Mr. Sakakibara said.

"This traditional part of the economy accounts for 80 to 90 percent of the GDP and constitutes 90 percent of employment," he said. "Changes will require major restructuring."

To succeed, the political and economic reorganization must be accompanied by financial reconstruction built around a fiscal consolidation, Mr. Sakakibara said. "The size of government debt is alarming," Mr. Sakakibara said. "If you include off-budget items, Japan's deficit at this moment is huge." For Related Topics See: Business

< < Back to Start of Article TOKYO Despite recent government attempts to put a positive spin on Japan's economic outlook, the world's second-largest economy could face a painful "double-dip" recession, Eisuke Sakakibara, a senior economist, warned over the weekend.

Known as "Mr. Yen" by the foreign-exchange dealers over whom he held legendary sway until his retirement from the post of deputy minister of finance less than two years ago, Mr. Sakakibara remains plugged into financial markets and their players as director of the Keio University Global Security Research Center.

The U.S. economy has further to slow, European confidence is sputtering and there is a 40 percent to 50 percent chance of a world recession, Mr. Sakakibara said.

"I was on Wall Street about a week ago and even those who are optimistic are not certain," he said in an interview with The International Herald Tribune. "The U.S. economy is still in the first phase of a slowdown."

As for the Japanese economy, Mr. Sakakibara said he remained pessimistic in the short term.

"I don't think the Japanese economy has turned around, and I think there is a possibility the economy will get into a double-dip recession," he said.

While Japan's January-to-March growth rate stood at near zero, Mr. Sakakibara said there was a strong possibility that the April-to-June period could plunge into negative territory by a large margin.

"Confidence has been deteriorating, corporate profits are expected to decline," Mr. Sakakibara said. "All the structural problems that plagued the Japanese economy are still there." . These statements strongly contrast recent comments by Mr. Sakakibara's successor as vice minister of finance, Haruhiko Kuroda.

"I very much respect Mr. Kuroda, but his comments are restrained by his position," Mr. Sakakibara said. "I know very well that as vice minister of finance you must be an optimist."

The prevailing sentiment of Japanese business executives will be discernible on Monday with the release of the influential tankan survey of corporate sentiment.

While the survey is expected to bring more negative news, some analysts are hopeful, citing a series of tax and accounting changes that took effect with the start of the fiscal year Sunday and a package of emergency measures to be announced Wednesday.

No changes have been significant enough yet, Mr. Sakakibara said, but he added that Japan's longer-term recovery should come out of the short-term hardship he expects.

"I am optimistic for Japan in the medium and long term," Mr. Sakakibara said. "We are about to enter a period of confusion, out of which major structural changes in the economic and political sphere will take place."

Political change means a more fundamental shift than the expected departure of the now highly unpopular prime minister, Yoshiro Mori, he said.

"A change of puppet means nothing," Mr. Sakakibara said. "You must also change the puppeteers."

Fundamental political changes are beginning to take place with the recent electoral victories of candidates who are not associated with the governing Liberal Democratic Party or the opposition, Mr. Sakakibara said. The trend will probably be re-enforced by the upcoming election for Tokyo's parliamentary representative in April and the upper house elections in July, he added.

"Change has started at a local level," Mr. Sakakibara said. "Policies will begin to be affected on a national level sometime toward the end of this year." . The main change that must take place is a re-engineering of Japan's domestic old-style economy, Mr. Sakakibara said.

"Everyone knows our very progressive export-oriented companies like Sony, Toyota and so on," Mr. Sakakibara said. "The real changes need to take place in the domestic distribution and manufacturing sectors like construction, food processing, agriculture and fishing."

Changes in the domestic economy, supported by a sea of subsidies and protected by regulations, will mean a great deal of pain, Mr. Sakakibara said.

"This traditional part of the economy accounts for 80 to 90 percent of the GDP and constitutes 90 percent of employment," he said. "Changes will require major restructuring."

To succeed, the political and economic reorganization must be accompanied by financial reconstruction built around a fiscal consolidation, Mr. Sakakibara said. "The size of government debt is alarming," Mr. Sakakibara said. "If you include off-budget items, Japan's deficit at this moment is huge." TOKYO Despite recent government attempts to put a positive spin on Japan's economic outlook, the world's second-largest economy could face a painful "double-dip" recession, Eisuke Sakakibara, a senior economist, warned over the weekend.

Known as "Mr. Yen" by the foreign-exchange dealers over whom he held legendary sway until his retirement from the post of deputy minister of finance less than two years ago, Mr. Sakakibara remains plugged into financial markets and their players as director of the Keio University Global Security Research Center.

The U.S. economy has further to slow, European confidence is sputtering and there is a 40 percent to 50 percent chance of a world recession, Mr. Sakakibara said.

"I was on Wall Street about a week ago and even those who are optimistic are not certain," he said in an interview with The International Herald Tribune. "The U.S. economy is still in the first phase of a slowdown." . As for the Japanese economy, Mr. Sakakibara said he remained pessimistic in the short term.

"I don't think the Japanese economy has turned around, and I think there is a possibility the economy will get into a double-dip recession," he said.

While Japan's January-to-March growth rate stood at near zero, Mr. Sakakibara said there was a strong possibility that the April-to-June period could plunge into negative territory by a large margin.

"Confidence has been deteriorating, corporate profits are expected to decline," Mr. Sakakibara said. "All the structural problems that plagued the Japanese economy are still there." . These statements strongly contrast recent comments by Mr. Sakakibara's successor as vice minister of finance, Haruhiko Kuroda. . "I very much respect Mr. Kuroda, but his comments are restrained by his position," Mr. Sakakibara said. "I know very well that as vice minister of finance you must be an optimist."

The prevailing sentiment of Japanese business executives will be discernible on Monday with the release of the influential tankan survey of corporate sentiment.

While the survey is expected to bring more negative news, some analysts are hopeful, citing a series of tax and accounting changes that took effect with the start of the fiscal year Sunday and a package of emergency measures to be announced Wednesday. . No changes have been significant enough yet, Mr. Sakakibara said, but he added that Japan's longer-term recovery should come out of the short-term hardship he expects. . "I am optimistic for Japan in the medium and long term," Mr. Sakakibara said. "We are about to enter a period of confusion, out of which major structural changes in the economic and political sphere will take place."

Political change means a more fundamental shift than the expected departure of the now highly unpopular prime minister, Yoshiro Mori, he said. . "A change of puppet means nothing," Mr. Sakakibara said. "You must also change the puppeteers."

Fundamental political changes are beginning to take place with the recent electoral victories of candidates who are not associated with the governing Liberal Democratic Party or the opposition, Mr. Sakakibara said. The trend will probably be re-enforced by the upcoming election for Tokyo's parliamentary representative in April and the upper house elections in July, he added.

"Change has started at a local level," Mr. Sakakibara said. "Policies will begin to be affected on a national level sometime toward the end of this year." . The main change that must take place is a re-engineering of Japan's domestic old-style economy, Mr. Sakakibara said.

"Everyone knows our very progressive export-oriented companies like Sony, Toyota and so on," Mr. Sakakibara said. "The real changes need to take place in the domestic distribution and manufacturing sectors like construction, food processing, agriculture and fishing."

Changes in the domestic economy, supported by a sea of subsidies and protected by regulations, will mean a great deal of pain, Mr. Sakakibara said. . "This traditional part of the economy accounts for 80 to 90 percent of the GDP and constitutes 90 percent of employment," he said. "Changes will require major restructuring."

To succeed, the political and economic reorganization must be accompanied by financial reconstruction built around a fiscal consolidation, Mr. Sakakibara said. "The size of government debt is alarming," Mr. Sakakibara said. "If you include off-budget items, Japan's deficit at this moment is huge." TOKYO Despite recent government attempts to put a positive spin on Japan's economic outlook, the world's second-largest economy could face a painful "double-dip" recession, Eisuke Sakakibara, a senior economist, warned over the weekend.

Known as "Mr. Yen" by the foreign-exchange dealers over whom he held legendary sway until his retirement from the post of deputy minister of finance less than two years ago, Mr. Sakakibara remains plugged into financial markets and their players as director of the Keio University Global Security Research Center.

The U.S. economy has further to slow, European confidence is sputtering and there is a 40 percent to 50 percent chance of a world recession, Mr. Sakakibara said.

"I was on Wall Street about a week ago and even those who are optimistic are not certain," he said in an interview with The International Herald Tribune. "The U.S. economy is still in the first phase of a slowdown." . As for the Japanese economy, Mr. Sakakibara said he remained pessimistic in the short term.

"I don't think the Japanese economy has turned around, and I think there is a possibility the economy will get into a double-dip recession," he said.

While Japan's January-to-March growth rate stood at near zero, Mr. Sakakibara said there was a strong possibility that the April-to-June period could plunge into negative territory by a large margin.

"Confidence has been deteriorating, corporate profits are expected to decline," Mr. Sakakibara said. "All the structural problems that plagued the Japanese economy are still there."

These statements strongly contrast recent comments by Mr. Sakakibara's successor as vice minister of finance, Haruhiko Kuroda. . "I very much respect Mr. Kuroda, but his comments are restrained by his position," Mr. Sakakibara said. "I know very well that as vice minister of finance you must be an optimist."

The prevailing sentiment of Japanese business executives will be discernible on Monday with the release of the influential tankan survey of corporate sentiment. . While the survey is expected to bring more negative news, some analysts are hopeful, citing a series of tax and accounting changes that took effect with the start of the fiscal year Sunday and a package of emergency measures to be announced Wednesday.

No changes have been significant enough yet, Mr. Sakakibara said, but he added that Japan's longer-term recovery should come out of the short-term hardship he expects.

"I am optimistic for Japan in the medium and long term," Mr. Sakakibara said. "We are about to enter a period of confusion, out of which major structural changes in the economic and political sphere will take place."

Political change means a more fundamental shift than the expected departure of the now highly unpopular prime minister, Yoshiro Mori, he said.

"A change of puppet means nothing," Mr. Sakakibara said. "You must also change the puppeteers."

Fundamental political changes are beginning to take place with the recent electoral victories of candidates who are not associated with the governing Liberal Democratic Party or the opposition, Mr. Sakakibara said. The trend will probably be re-enforced by the upcoming election for Tokyo's parliamentary representative in April and the upper house elections in July, he added.

"Change has started at a local level," Mr. Sakakibara said. "Policies will begin to be affected on a national level sometime toward the end of this year." . The main change that must take place is a re-engineering of Japan's domestic old-style economy, Mr. Sakakibara said.

"Everyone knows our very progressive export-oriented companies like Sony, Toyota and so on," Mr. Sakakibara said. "The real changes need to take place in the domestic distribution and manufacturing sectors like construction, food processing, agriculture and fishing."

Changes in the domestic economy, supported by a sea of subsidies and protected by regulations, will mean a great deal of pain, Mr. Sakakibara said.

"This traditional part of the economy accounts for 80 to 90 percent of the GDP and constitutes 90 percent of employment," he said. "Changes will require major restructuring."

To succeed, the political and economic reorganization must be accompanied by financial reconstruction built around a fiscal consolidation, Mr. Sakakibara said. "The size of government debt is alarming," Mr. Sakakibara said. "If you include off-budget items, Japan's deficit at this moment is huge."

-- Carl Jenkins (somewherepress@aol.com), April 02, 2001

Answers

Sorry about formatting but here's the link:

http://www.iht.com/articles/15476.html

-- Carl Jenkins (somewherepress@aol.com), April 02, 2001.

Looks ok to me.

-- Martin Thompson (mthom1927@aol.com), April 02, 2001.