Mon, Dec 29, 2003 - Page 10 News List

Japanese unable to shake off the deflation monkey

AFP , TOKYO

Meanwhile, non-manufacturers, like retailers and builders that rely on domestic demand, cannot easily boost investment in equipment as deflation or zero inflation will continue weighing on their profitability, he added.

The Bank of Japan's quarterly Tankan survey showed in October that a majority of manufacturers felt confident about business conditions for the first time in nearly three years.

Business sentiment further improved this month for large manufacturers, but the survey also pointed to struggling smaller firms.

Most economists expect expansion to continue through Fiscal Year 2004, but forecast a US slowdown and eventual declines in exports caused by the rising yen, and the fading effect of corporate restructuring can chill business and consumer sentiment again.

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