TOKYO: Most leaders of major Japanese companies believe the economy is picking up, but many of them are still cautious about making capital investments, according to a Yomiuri Shimbun survey.
While many corporate heads expect the nation’s economy to continue on a recovery trend, some are concerned about stagnation and deterioration of the economy, as they are unable to shake their uncertainty regarding the situation after the consumption tax hike in April.
The survey included leaders of 30 major companies in December. When asked about their concerns for the future, many said they were wary about foreign economies and exchange markets rather than the domestic economy.
Eighteen said they were worried about an economic downturn in China and other nations, 12 referred to currency movements such as depreciation and appreciation of the yen and nine mentioned the consumption tax hike in April. Some mentioned stagnation of the growth strategy of Prime Minister Shinzo Abe’s administration.
When asked about the consumption tax increase, 12 corporate heads said it would have little effect on their business.
Seven leaders said they may be negatively affected to some extent following the tax hike; three said they would suffer a strong negative effect, and two said they did not know what would happen.
“I’m concerned about a decline in personal consumption, but I think it will have only a transient effect on us,” East Japan Railway Co President Tetsuro Tomita said.
WP-bloomberg
