Japan: Austerity May Hobble Reform

It's beginning to look as though Prime Minister Ryutaro Hashimoto is serious about reforming Japan's financial system. Over the past couple of months, he has announced several measures to open up the banking, brokerage, and insurance industries to foreign competition. However, it has taken a while for the message to sink in. Now, the stocks of numerous companies in Japan's heretofore protected financial markets are nose-diving, pulling the Nikkei down yet again. Significantly, though, a group of highly competitive multinational companies, including Toyota, Honda, and Sony, have held up during the market sell-off.

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