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The Japanese government's hopes that economic recovery is imminent are echoed by some securities firms, which expect GDP to rise by around 1.9% for fiscal 1999. However, prices and land values continue falling, the government may have to underwrite the entire insurance sector and banks continue to suffer from bad loans. Such pressure is forcing an accelerated restructuring of the economy, backed by foreign investors buying into Japanese stocks and underpinning Japan's recovery.

Foreigners are beginning to play a significant role in private banking and asset management in Japan. Indeed, 21 foreign stockbroking concerns represented 38.7% of the trading on the Tokyo Stock Exchange in Oct 1997. Many foreigners have now been licensed to manage tax-qualified pension plans and mutual funds. Continued economic uncertainty in Japan means that the Japanese will probably increase their international investments.

Claims that Daiichi Kangyo Bank, Nomura Securities and Yamaichi Securities may have been involved with making illegal payments to extortionists could have a negative impact on planned Big Bang financial deregulation in Japan. Japanese Prime Minister Ryutaro Hashimoto has been criticized for not introducing financial reform at a more rapid pace, and there are mixed views about whether it will be possible to achieve fairness, transparency and the enforcement of regulations. Some observers believe that financial deregulation will lead to some large Japanese banks coming under foreign control.

The Japanese economy looks set for recovery after its period of stagnation from 1992 to 1995. Unemployment levels are falling; consumption and investment are rising. Economic growth forecasts vary around the 2% mark. The recovery has been aided by increasing exports due to the large drop in the value of the yen to a rate of 115 yen to the US dollar. The overall trade surplus grew by 160% in Apr 1997. Another important factor has been government action to restart the economy, but this means that recovery will be accompanied by a large budget deficit. Bank bad debts also pose a problem.

A used car salesman in Japan has revolutionized the way that used cars are sold. His company, Gulliver International Corp., buys used cars from individuals and sells them via computer terminals placed in shopping centers, petrol stations and coffee shops. Used cars bought by Gulliver that are not sold within 10 days are auctioned. The Dolphinet system has 500 directly-owned and franchised outlets, with corporate sales in February 1999 reaching 25.4 billion yen.

Japan plans to accelerate its ballistic missile defense (BMD) and might possibly launch pre-emptive strikes in the near future to defend its territory. Japan has about 400 kilograms of weapons-grade plutonium, which local defense sources claim would allow Japan to assemble about a dozen warheads in nine months. It also has the option of modifying its J-1 (M-5) launch vehicles into intercontinental ballistic missiles.

A review of pace of economic reforms in Japan is presented. Unlike United States, Japanese companies do not resort to mass layoffs, despite financial pressures. It is these human values that will force the Japanese governments to opt for policies that are slow and steady, for managing government debts that are standing at 160 percent of the GDP.

The expansion of military roles is speeding up in Japan due to overseas conflicts. Japan Prime Minister Junichiro Koizumi has dispatched troops on overseas peace-keeping operations (PKO) a part of standard duties for Self-Defense Forces and he would decide in December 2005 whether to extend their mission.

Japanese prime minister Keizo Obuchi's promise to reduce the 70% maximum taxation rate on inheritances has failed to materialise, prompting complaints from small- and medium-sized enterprises.

Despite initial unpopularity. Japanese prime minister Keizo Obuchi has confounded his critics by scrapping austerity policies and encouraging a government spending spree aimed at rejuvenating small business. He is expected to expand health and welfare spending and promises loan guarantees worth 20 trillion yen to bolster small companies. Obuchi's polices are aimed at garnering support for his Liberal Democratic Party and strengthening his own position.

Chiyoda-zushi Corp has seen a rise in sales and outlets, despite slow growth for the restaurant industry in Japan. Hideto Nakajima, the head of the company, has sought to make the company's products more accessible, and queues are found outside its restaurants, where prices are much lower than average. He stresses the need for productivity growth, and has emphasized the employment of women, though men have tended to figure more in the sushi tradition. Women are seen as good customers in that they do not stay as long as do men, which helps to boost turnover.

Japan's ongoing economic recession has produced a new national retail leader, Ito-Yokado. The company's steady performance has resulted in a net income of 66.6 billion yen, outstripping its closest, risk-taking rival Daiei by 3.7 times. Ito-Yokado's conservative strategy shows that growth through increased market share is no longer the only winning formula.

Japanese toy company People Co has seen considerable success from designing toys for children aged three or younger and commissioning their production. Its sales have continued to rise, despite the weakening of the Japanese economy. It has focused on profit, rather than growth, in sharp contrast with most Japanese companies. Its employees, who are mainly women, are expected to meet very high standards, but most of them have been with the company for an average of around five years.