While U.S. companies earned a 24.2 percent return on equity in 1997, Japanese firms earned 3 percent. Increased competition and shareholder unhappiness have prodded Japanese companies to announce restructuring efforts. However, these restructuring efforts generally are being effected by voluntary retirement and attrition rather than job cuts, a generally slow process. Whether Japan's gross domestic product will increase this year is uncertain. While government predictions are for a .5 percent growth, some private analysts predict the economy to finish down by .5 percent.
Reports indicate that the banking sector is a particular trouble spot.
The government has supported consumer spending by a variety of policy measures. Japan's is supporting the yen, that is, not allowing the value of the yen relative to the dollar to depreciate.