The specter of hard times toward the March end of the business year looms large.

The accelerated disposal of nonperforming loans has forced more companies out of business, leaving more workers unemployed.

Foreign investors have remained on the sidelines amid political uncertainty in the wake of Foreign Minister Makiko Tanaka’s sacking, and Prime Minister Junichiro Koizumi’s policy speech before the Diet went largely unheeded last week.

With a steep decline in his administration’s public approval ratings, the market has taken little comfort from measures announced by the government to find a floor for the falling stock market.

The package was hastily mapped out ahead of last week’s meeting of financial leaders from the Group of Seven industrialized nations in Ottawa and the Japan-U.S. summit to be held in Tokyo this weekend.

In the package, the government signaled to the marketplace that it intends to step in to counter short-selling. But the measures are aimed at artificially keeping the market afloat, and as such are unbecoming of an industrialized nation.

The package may help ease selling pressure caused by the unwinding of cross-shareholdings and provide investors with opportunities to adjust their oversold positions, but this can hardly be expected to go a long way toward helping shore up the market.

When a bout of position-adjusting buying ends, share prices should come under fresh downward pressure.

Another deep slide, nonetheless, could provide investors with opportunities to search for potential profits.

Yet, chances of a lasting rebound are hinging largely on U.S. economic prospects.

Although the U.S. economy grew at an annualized rate of 0.2 percent in the final three months of last year, the better-than-expected showing was largely powered by a strong pickup in consumer spending and a surge in auto sales. Consumers apparently took advantage of free financing offers.

The failure of U.S. energy giant Enron Corp. has shaken investor confidence in U.S. accounting rules long considered the global standard.

A flight of money out of the U.S. financial market could spark havoc in financial markets around the globe.

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