TITLE

The Greenspan of Japan

AUTHOR(S)
Werner, Richard A.
PUB. DATE
May 2004
SOURCE
Newsweek (Pacific Edition);5/3/2004 (Pacific Edition), Vol. 143 Issue 18, p44
SOURCE TYPE
Periodical
DOC. TYPE
Article
ABSTRACT
For years it has been said that Japan cannot recover without major reform: a wholesale shift from Asian-style welfare capitalism to U.S.-style stock-market capitalism. Now investors are buzzing about "recovery" despite very few real changes under Prime Minister Junichiro Koizumi. Investors are not betting on Japan's political leader, but on its central-bank chief to deliver real economic growth. Toshihiko Fukui, governor of the Bank of Japan for a year now, has been hailed by the markets as a breath of fresh air, following years of misguided central-bank policies. The idea that the economy depends more on the central-bank governor than the prime minister is not controversial. Many foreign investors never fully believed that reform was the key to Japan's future; they know that stock markets can surge irrespective of economic structure, as long as monetary policy is stimulative. It is the job of the central bank to ensure that the right amount of money is circulating so that there is stable growth without deflation or inflation. Many foreign investors now believe that Fukui has stemmed the tide. He took over his job at a time when the stock market was at a 20-year low and the financial system was on the verge of a meltdown. Things have changed dramatically in the past year. Nominal GDP has picked up sharply, growing 0.9 percent in the fourth quarter of 2003. Housing starts rose by 9.4 percent in December, and passenger-car sales jumped 11.7 percent in January. Many bank stocks have soared more than 500 percent.
ACCESSION #
13108407

 

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