After a decade and a half of recession, “deflation and national funk”, Japan may be bouncing back, says Richard Lloyd Parry in The Times. But when it comes to property, “we can’t shake off the memory of the bubble”, Masaaki Isozu, a Japanese software engineer, told Lloyd Parry. That means that the average man on the street “can’t be sure of the recovery yet”.
However, according to official figures, unemployment is falling (for the first time in eight years), growth will be up to 2.4% this year (from nothing for over a decade) and “Tokyo once again feels like a city growing richer by the day”.
So it’s no wonder that “corporate Japan is preparing to face an onslaught of foreign takeovers”, says Leo Lewis, also in The Times. Recently, the Japanese government announced the biggest shake-up of company law for 50 years. “After years of receiving protection under law, top companies in a variety of sectors are set to become attractive targets for foreign buyers.”
This means that British firms such as AstraZeneca and Glaxo-SmithKline are expected to take an interest in snapping up their Japanese peers.
However, it is also thought that “the changes would spark panic among Japanese companies”, says Lewis. That could lead to potential targets introducing defence strategies, such as poison pills, to “fend off takeover bids”.
If bids do emerge, it is likely to boost Japanese stocks further, along with the continuing domestic recovery. Though memories of the housing bubble may persist, consumer confidence in March was at its highest level since 1991. “The underlying trend is still very strong, but people are still looking behind them,” Masaako Kanno, economist at JP Morgan in Tokyo, told David Pilling in the FT.
And as the dollar falls against other currencies, investors will be looking to defensive stocks, such as drug, food and utility firms, says The Standard China.