Political uncertainty impacts economic outlook for the year

Japan's long-term prospects remain good, based upon the sustained improvement in corporate profitability and the substantial pent up domestic demand for both capital and consumer goods. However, the outlook for 2007 is less clear given increasing political uncertainty, which could limit reforms accompanied by conflicting economic releases. These issues are likely to restrain investor buying interest until they are resolved, when the fundamentals can reassert themselves. Prime Minister Shinzo Abe's approval rating has declined from 67% to 46% since readmitting 11 MPs previously ejected ...