• Kyodo News

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The heads of the major business lobbies expressed caution Tuesday about the prospects for an economic recovery in 2010, warning that the country is unlikely to emerge from deflation in the immediate future.

The executives of top companies who gathered for a New Year’s reception at a Tokyo hotel also called for the government to swiftly implement the recently unveiled growth strategy through 2020 to generate demand and reverse falling prices.

“The biggest challenge for this year is to bring the economy back to a sustainable growth track,” Fujio Mitarai, chairman of the Japan Business Federation, said at a news conference.

“Unfortunately, the Japanese economy has not yet entered a self-sustaining recovery process and deflation is likely to continue for some time,” said Mitarai, who heads Japan’s most powerful business lobby, more commonly known as Nippon Keidanren.

At the joint news conference attended by the chiefs of two other business lobbies, Mitarai added that the economy is likely to pick up by the latter half of the year and predicted that the Nikkei stock average will trade between the 8,000 and 12,000 levels while the dollar will trade in the ¥85 to ¥100 range.

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