Japan's Tankan Business Confidence Plunges Most in 34 Years

Reviewed by Takahiro MIYAO

Article:
Japan's Tankan Business Confidence Plunges Most in 34 Years
Bloomberg (12/15/2008):
http://www.bloomberg.com/apps/
news?pid=20601068&sid=aSvZQlrXwySY&refer=home

Comments:

Not much comment can be given on the result of the Bank of Japan's quarterly Tankan survey just announced, where the index to show business confidence dropped from minus 3 to minus 24 this time, as largely expected, according to the Bloomberg new report linked above. Actually, the previous result of minus 3 was not an accurate figure to measure the true business confidence not just for large companies but for all firms including small businesses three months ago. Therefore, the dismal result this time was not surprising at all in view of what has been happening in Japan as well as in the global economy for the last several months.

The current downward trend in almost all business indexes is a result of the so-called "deleveraging" process in the unprecedented scale all over the world. Therefore, no existing economic model could possibly predict the future course of the current recessionary movement within each country or for the global economy as a whole for that matter. It looks like all the national governments and central banks are trying hard to adopt stimulus policies as much as they can in an attempt to prevent their economies from disastrous failures. Given the unprecedented circumstance, however, all they can do is "prepare for the worst and hoping for the best."

Unfortunately, due to its political problem, it is somewhat doubtful if the Japanese government is really doing its best to stimulate the economy. Bolder policy measures should be adopted immediately in order to avoid further deterioration in business confidence in Japan.

Acknowledgment:
This review is adopted from the following blog (with its Japanese translation):
http://glocom.blog59.fc2.com/blog-date-20081215.html