Japanese firms credit foreign demand for recovery

Japanese firms credit foreign demand for recovery

Agence France-Presse, Tokyo

Most major Japanese firms credit their own cost-cutting and overseas demand for the country's economic recovery, while government reforms have done little to help, according to a poll in the Asahi Shimbun Sunday.

Eighty-two out of 100 major firms surveyed said strong overseas demand was the main reason for the recovery, while 77 cited internal restructuring, according to the poll of leading companies such as Toyota Motor, Canon and IBM Japan.

Only three firms credited the Bank of Japan's easy monetary policy for easing deflation worries, the same number who said the government's push to dispose of bad loans had helped boost the economy.

"This recovery is due to internal company efforts, not (government) economic stimulus," Aeon Co. Ltd. executive managing director Yoichi Kimura told the daily.

The survey of 50 manufacturers and 50 non-manufacturers was taken in late May and early June, the paper said.

The poll showed 70 firms expected revenues to increase in the year to March from a year ago, while 77 expected recurring profits to improve.

Seventy-one said they thought consumer spending would gradually increase, more than double the number who thought so just eight months earlier.

The survey is the latest indicator of brightness in Japan's economy, fed by overseas demand for high-tech goods and autos.

Japan's consumer confidence hit a near 13-year high in May, with the key index rising 2.9 points from April to 48.3, supported by better prospects for employment and earnings, the Cabinet Office said Friday.

It followed announcements Thursday that wholesale prices rose 1.1 percent, the biggest increase since October 1997, and that core private sector machinery orders rose 11.8 percent in April from a month earlier.

Japan's gross domestic product grew an annualized 6.1 percent in January-March from the previous quarter, following a 7.3 percent rate the quarter earlier, the nation's strongest growth in 13 years.