Once Again, Japan's Fix Is Short

Reviewed By Hitoshi URABE

Article:
"Once Again, Japan's Fix Is Short"
http://www.nytimes.com/2002/03/28/business/worldbusiness/28YEN.html
By KEN BELSON, The New York Times

Comments:
End of March is not only the end of fiscal year in Japan. It is a financial year end for a large number of, and for almost all the major corporations in Japan. It is also the end of a school year, which is the reason for businesses to customarily hold ceremonies to receive their new employees on April 1. The season is just fit, blessed with cherry blossoms the bright spring sun, to celebrate the turning point for individuals, corporations, and the government.

So it is also very appropriate, to look around and check where we are and which way we are heading. The article, prepared by a well informed writer on Japanese affairs, has done just that, summarizing recent events and providing some prospects.

The article acknowledges that the policies adopted by the government to get over the anxieties that had mounted toward the fiscal end had worked. Measures such as PLO - a sarcastic expression which stands for "price lifting operation" lead by the government unofficially to prop up stock prices – effectively recovered market prices so as to help corporations close the books for the year with relatively healthy figures.

It then points out that such policy would work only for a brief period of time, noting the market prices had already eroded toward the very end of the term, it proposes that the effects of the measures were already fading.

Arbitrary policy exercises such as those we have seen recently may show immediate results, but would have detrimental effects in the long run by undermining peoples' faith in the government and its policies. This has been taken up in presentations on this GLOCOM platform as well, most disfavoring such controversial measures including the restriction on short selling.

The summary of the article, a way of a quotation by an economist, is worth repeating here also as a summary of this review:
"Policy-making over the past decade has been all about system preservation and refusal to face up to the scale of the problems, which seems to be where we are currently heading."