The Gloom In Japan May Be LiftingPaul Magnusson
Despite all the bad news coming from Japan lately, one economist sees rays of hope for 1994. According to Geoffrey Barker, chief economist in Tokyo for Baring Securities (Japan) Ltd., the turning point is near. Barker sees Japan headed for 2.5% growth next year.
Housing starts, for example, are up, and consumers are beginning to deck their homes out with consumer durables, says Barker. While a cool summer caused air-conditioner sales to collapse, there was a mild upturn in purchases of color TVs and VCRs. Month-to-month car sales are also up for the past three months, after almost three years of falling domestic auto sales.
Meanwhile, discounting and low inflation are providing strong incentives for consumers, who are sitting on cash not spent during the cool summer. One vital sign of life: Import volume shot up 8.7% during August. Barker argues that the dollar-based trade surplus has peaked, freeing the overvalued yen to weaken against the dollar. That will give export industries a bit of breathing room, says Barker, and finally signal that Japan's recession has come to an end.