Current Situation  While the Japanese economy has stopped deteriorating, there are not yet clear signs of a recovery. There are four reasons behind the halt in deterioration and which can be summarized as follows: First, an increase in policy-driven demand such as public investment and housing investment has been observed.
Second, under the continued expansion of the US economy, the economic environment overseas has been improving as a whole as illustrated by the gradual recovery of Asian economies and the rebound of international commodity prices. Third, as a result of such developments in final demand together with the cautious attitude of firms toward production, inventory adjustment has progressed.