bank of japan presents its quarterly economic outlook for spring 1997 bank of japan, quarterly bulletin, may 1997 ( advance summary ). 1. japan ’ s economy continues on a recovery trend despite some fluctuations caused by the rise in the consumption tax rate, with private demand showing underlying firmness. among final demand items, public - sector investment has decreased, and housing investment has declined reflecting the reversal in the stepped - up demand which took place ahead of the rise in the consumption tax rate. however, net exports have continued on an increasing trend, and business fixed investment has been rising steadily. personal consumption is on a moderate recovery trend. meanwhile, inventories are generally at appropriate levels. in these circumstances, industrial production has been strengthening since autumn 1996. labor market conditions have been improving moderately on the whole. prices have stopped declining. domestic wholesale prices ( adjusted for seasonal electricity rates ) increased in early april 1997 reflecting the rise in the consumption tax rate. however, the downward pressures remain strong on those such as electrical machinery. despite these pressures, domestic wholesale prices have remained unchanged or have increased marginally. this reflects the yen ’ s depreciation and the higher oil prices to date, as well as the moderate improvement in domestic supply and demand conditions. the year - to - year declines in corporate service prices are narrowing, and consumer prices ( nationwide, excluding perishables ) are marginally above the previous year ’ s level. with respect to commercial land prices, prices of large and well - located land suited for major developments have stopped declining, while those of land less suited for use have continued to decline. as for residential land, prices have gradually stopped declining. on the balance of payments, the real trade surplus has been on an increasing trend, and the nominal current - account surplus has also increased, albeit very moderately. 2. in the financial markets, the overnight call rate ( uncollateralized ) rose temporarily around the fiscal year - end, but has since declined to the level slightly below the official discount rate of 0. 5 per cent. the 3 - month cd rate has continued at around 0. 50 - 0. 55 per cent except for the fiscal year - end. the long - term government bond yield has been declining since summer 1996, and has recently moved at a low level of 2. 1 - 2. 2 per cent. stock prices plummeted between the end of 1996 and the beginning of 1997, and have recently stayed at somewhat over ¥18, 000. on the

of the action of a state. there were savoyards, bretons, gascons before there were french, and bavarians and prussians before there were germans. this does not imply that europe could become a nation, not even as montesquieu pretended “ une nation composee de plusieurs ” ( a nation composed of many ). europeans are too diverse and too self - critical for that to happen. we belong nevertheless to two societies : our own society and the european one as the essential background for our rationalist, universal values. reason can built new realities. in his famous vienna address in 1935 on the existential crisis of europe, edmund husserl underlines the fact that philosophical reason is the « original phenomenon that characterizes europe ». and his conclusion was : “ the existential crisis of europe has only two outcomes : either europe will disappear in becoming ever more distant from its own rational signification, that is its vital sense, and will sink in the hatred of the spirit and in barbarity ; or europe will be reborn from the philosophical spirit as a result of a heroism of reason that will overcome naturalism ”. we know very well what happened in those dramatic times and how we could never again trust reason the same way. we live now in so - called post - modern times, which value more the sceptical side of reason. so, it is perhaps more realistic to appeal to less lofty considerations and stress the dense network of interests that tie our nations together. at this crucial moment of the european project referring to the benefits of the “ doux commerce ” allows us to take comfort and prop our hopes in another piece of wisdom from montesquieu when he reminded us that : “ les nations sont comme les hommes, elles aiment ce que satisfait ses passions mais elles preferent encore plus ce que garantit leurs interets ”. 13 thank you for your attention. “ nations are like men, they love what satisfies their passions but like even more what guarantees their interests ”.