Economic Survey of Japan - Press Review


1. Summary

The OECD Economic Survey of Japan (published 20 January 2005) received widespread coverage in the Japanese press.

Under the headline “OECD cuts forecast on Japan's growth”, the Yomiuri Shimbun  highlighted the survey’s view that  Japan’s  budget deficits were “unsustainable” and its call for more aggressive spending cuts. The Japan Times focused on the need to cut budget deficits and “optimize the labor market”. Deflation is still a concern as the Nihon Keizai Shimbun, the Mainichi, Asahi Evening News pointed out. Nonetheless, conditions were the best in a decade for the Japanese economy, the Nihon Keizai Shimbun reported. The Sankei Shimbun emphasised the survey’s recommendation that Japanese banks should take measures to reduce the number of bad loans. Kyodo News quoted OECD economist Randall Jones, who said the country was emerging from 10 years of stagnation but still faced a number of problems. He said Bank of Japan policy has so far not been  successful in stopping deflation.

In the UK, the Financial Times  highlighted the survey’s  warning about deflation. In an editorial the newspaper  described Japan’s recovery as “incomplete”.  The survey was again the subject of a  Financial Times article two days later when the focus was the concern about  an "unbridgeable divide between workers in non-regular and regular employment".

For Reuters, the "OECD sees Japan’s economy poised for sustained growth”.  Although, according to The Times, Japan’s public debt of 160 per cent of GDP is clearly not sustainable.

In France, La Tribune underlined the fragile recovery of the Japanese economy, pointing to the challenges ahead, such as fight against deflation and public deficits. Concern over deflation was also picked up by Le Monde. AFP focused on the yen's high value and its risk for exports. Randall Jones was quoted as saying that “in the short term, a stronger yen may depress exports and make growth a bit lower", before noting that the currency's rise over the past few months had had some positive aspects such as offsetting the increase in crude oil prices.

In Germany, the FT Deutschland referred to Japan’s  slow growth while Frankfurter Allgemeine Zeitung reported that the OECD advises further loosening of monetary policy.

For the Swiss paper Neue Zürcher Zeitung the OECD sees Japan in the best economic situation for 10 years but deflation and public deficits remain a concern.

2. References

Financial Times
21/01 - “OECD warns on Japan deflation”; “An incomplete economic recovery”
24/01 - “Japan ‘creating sub-class of poorly paid’”
26/01 - “Japanese watchdog raids 30 building companies”
28/01 - “Japan’s finance minister seeks higher sales tax”
20/01 - OECD sees Japan economy poised for sustained growth
21/01 - Need to know / Economics
La Tribune
21/01 - «L’embellie japonaise reste fragile»
Le Monde
25/01 - «Le Japon peine à sortir de la déflation»
20/01 - «Japon: une forte appréciation du yen est un risque majeur (OCDE)»
Financial Times Deutschland
21/01 - “OECD prognostiziert für Japan längsten Aufschwung seit 1991; Industrieländerorganisation warnt vor Zinserhöhung”
Frankfurter Allgemeine Zeitung
25/01 - “Japans Deflation scheint bald überwunden; OECD empfiehlt weiterhin lockere Geldpolitik”
Neue Zürcher Zeitung
21/01 - “Japan noch nicht aus dem Schneider”


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