BIS Review 70/1998  -5-  In the “Annual Review of Monetary and Economic Developments in Fiscal 1996,” the Bank pointed out that the momentum of the economic recovery firmed gradually during fiscal 1996, but this was not necessarily accompanied by an improvement in private-sector confidence.6 In fiscal 1997, in addition to the fiscal drag, the Japanese economy experienced diverse negative impacts such as failures in the financial system and the financial and economic crises in Asian economies.
Thus, the recovery which had been proceeding since the end of 1993 was interrupted. It cannot be denied that economic entities’ confidence was damaged further. Results of various business surveys indicated that the recovery of economic entities’ confidence was further delayed.