Japan's troubled companies miss opportunities in crisis: PERC

Japan's troubled companies miss opportunities in crisis: PERC

SINGAPORE (Reuters): Japan's economic problems are preventing
its banks and companies from taking advantage of opportunities
arising from Asia's financial crisis, the Hong Kong-based
Political & Economic Risk Consultancy (PERC) said.

PERC's fortnightly report on Asian business and politics said
Japan's large exposure to the region -- including around US$23
billion in debt owed by Indonesia -- could put it in a strong
position to gain from the region's troubles if it converts debt
to equity or seizes assets from borrowers.

"Yet the weak state of the Japanese economy, especially its
ailing banking system, will make it very difficult for Japanese
companies to turn this exposure to their advantage," PERC said at
the weekend.

Japanese banks are so squeezed for capital at home they are
finding it difficult to write down asset values on their books,
it said.

U.S. banks are less exposed in Asian countries than their
Japanese counterparts and are being much more aggressive in
trying to buy into local banks, the report added.

Meanwhile, Japanese firms are suffering all the pain caused by
the crisis without realizing any of the gain their counterparts
in the United States and Europe seem to be excited about, PERC
said.

"In this respect, U.S., Australian and European companies
would seem to have an advantage over Japanese companies in being
able to turn the economic difficulties affecting much of East and
Southeast Asia to their advantage," the report said.

PERC added that Japan was probably the major economy most
vulnerable to an economic collapse in Indonesia because of the
Southeast Asian country's importance as a source of raw materials
and a destination for overseas investments.

The report said this made cooperation with Singapore vital for
Japan because of the city-state's influence in the region and its
status as a relative safe haven from the regional upheavals.

Japan may look to the United States but if Tokyo wants to
protect its own interests, "it probably has little choice but to
play ball with Singapore," it said.