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Stock Market / Japan
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2002-10-13 21:15:36-04
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Stock Market Downturn vexes Japan
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It's worry, worry, worry in Japan as the slalom-like slide in Japan's stock exchange could harm companies, banks
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Japan's stockmarket is beginning to look like the downhill slalom at the Olympics as share prices continue to fall. The slide could eventually imperil companies and major banks. The main index on the Tokyo Stock Exchange dropped again on Thursday closing at a new 19-year low. The lowest finish since April 8, 1983. Stocks recovered slightly on Friday with the benchmark Nikkei rising slightly by 1.7 percent, however, analysts are predicting that any gains will have a short life. Many Japanese are concerned that Prime Minister Junichiro Koizumi has no recovery plans for the economy. The new financial services minister, Heizo Takenaka promised to speed up the clean up of bad loans in a "quicker, larger-scale and more understandable" way. This statement was intended to assuage investor confidence but may have backfired as the possibility of wholesale corporate bankruptcies is the new nightmare. Deflation is at the heart of Japan's economic woes. The deflation is fueled by an aging population which requires less food, housing and automobiles than younger age groups. A declining birth rate is another big problem. Growing families consume more basic things such as rice, toys and diapers. Surveys of young Japanese women increasingly show that they prefer to indulge in designer clothes and expensive personal luxuries rather than settling down and starting a family. Narcissism reigns, even in Japan. So unless some dramatic changes occur in the Japanese psyche we predict that Japan may very well end up a nation of old folks living in nursing homes largely staffed by Thai nurses and doctors. Bad loans at Japan's banks are estimated to total US$324 billion and Japan's public debt is about US$ 5 billion or 135 percent of its gross domestic product.
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