The larger the original adjustment pressure, the greater energy and longer time these efforts will require. A reduction in investment and labor costs is indispensable for companies to recover their earnings power. If aggregated, however, such reduction will work to exert downward pressure on domestic demand and thus hinder the recovery of overall business conditions.
I think the efforts of companies to restructure their businesses have finally begun to bear fruit recently. Corporate profits have been increasing since last fiscal year. At present, the ratio of current profits to sales has approached almost its highest level since the bursting of the bubble.