b. Business fixed investment The first point to be considered regarding business fixed investment is developments in foreign exchange rates. Specifically, if the yen appreciates in the foreign exchange market as a result of investors’ risk aversion having increased globally, due in part to developments in overseas economies, this could in turn deteriorate corporate profits, thereby having the effect of constraining business fixed investment.
The second point is that medium- to long-term growth expectations for Japan’s economy might not be raised as much as expected, depending on, for example, the progress made with respect to promotion of labor force participation of women and the elderly as well as the government’s growth strategy and the private sector’s initiatives in strengthening the economy’s growth potential.