There is currently widespread pessimism in the Japanese stock market. Foreign investors are selling, and Japanese companies are also unwinding cross-held shares. The biggest reasons for the decline have been economic conditions in the United States and Japan, along with a worsening outlook for corporate profits. It would be a mistake to believe that these factors will continue. Japanese companies are continuing to cut costs in an effort to obtain better results.
Attention is focused on reorganization in the business world.
If reorganization corrects surplus facilities and excessive competition, corporate profits and competitiveness look set to rise. Because of policies that have been put in place to stabilize the financial markets, the uncertainty of today is different from that of 1998. Meanwhile, while the United States is forecast to suffer a downturn, this could be thought of as cyclical. If Europe cuts interest rates and the new administration in Washington implements sweeping tax cuts, the economy could be back on an expansionary track soon. So it is better not to be overly anxious about the future.