The outlook that we have as the main scenario is that, while Japan's economic growth will likely remain slow for the time being, it is expected to gradually return onto a moderate growth path thereafter without experiencing a deep adjustment phase. There are three reasons for this outlook.
First, the robustness of Japan's economy against external shocks has been remarkably strengthened compared with the past. As a result of restructuring efforts during the prolonged adjustment phase after the burst of the bubble, Japanese firms currently face no pressure to adjust production capacity, inventory, or employment. For this reason, the likelihood of any shock triggering a large-scale adjustment seems small.