Businesses in Japan remain skeptical about the economy, a survey among the country’s leading firms suggested. A majority of the respondents or 70% of 105 top Japanese firms said the economy is slowing down.
The survey was carried out by Kyodo News in December among executives of leading companies which include Canon Inc., Nippon Steel Corp., Sony Corp., Toyota Motor Corp. and Mitsubishi UFJ Financial Group Inc.
Asked how they see the Japanese economy, 17 companies said it was “slowing” or “gradually slowing”. On the other hand, 58 companies responded that the economy is “leveling out”.
Factors affecting the bleak economic outlook of these leading companies are the continued surging of the yen against the dollar and the slowdown in the economies of the US and the Europe. In particular, 64 companies thought the European economic crisis is causing their anxiety for the economy while 61 firms pointed out the rising yen as a main hindrance.
There were 49 companies which said they expect economic activity to improve for the next six months while 43 firms projected an unchanged situation in the economy.
Survey results also showed that most of the companies, numbering to 70, approved of the move to increase consumption tax rate as proposed by Prime Minister Yoshihiko Noda and his administration for purposes of a comprehensive social security and taxation reform. Majority of them however, intimated that along with the hike in consumption tax is an effort by the government to reduce expenditures and endeavor to upbeat economic activity.