It is for the most part based on information that was available up until 8 May, the “cut-off” date for this Review. It is now ten months since the eruption of the market turmoil which was triggered by the surge in delinquencies on US subprime mortgages.
Thus, once Japanese companies recover their earnings power to a certain extent, their next challenge will be to make their capital equipment more productive through new investments. Many Japanese companies have also reduced labor costs by restraining the hiring of new regular employees.