Most chief executive officers at major corporations expect the economy to either remain flat or recede slowly in 2005 due mainly to unfavorable overseas factors, according to a Kyodo News survey released Sunday.

Covering top executives at 105 companies including Nippon Steel Corp., Toyota Motor Corp., Sony Corp. and Mitsubishi Tokyo Financial Group Inc., 52 percent have a bearish take on the year.

On the other side of the coin, the survey found that 44 percent of the total expect the economy to continue its moderate expansion into 2005.

The survey was conducted in mid-December.

Many of the executives with bullish views expect corporate capital spending to keep increasing while the adverse effect of bad loans in the banking sector will continue to ease.

Some based their views on expectations of China's continued economic growth and a pickup in earnings at Japanese companies.

In contrast, 20 percent of the 105 executives forecast a gradual slowdown in economic activity, while 32 percent predicted it will remain flat.

A possible downturn in U.S. economic activity was the No. 1 reason for their concerns about Japan's economic outlook.

Other areas of concern were the yen's appreciation and higher prices of crude oil and raw materials.

Turning to corporate earnings in fiscal 2005, 52 executives said their companies will score moderate profit gains and two forecast a steep increase. Three executives predicted profit falls, and 13 forecast their profit lines will level off.

The expected exchange rate for the yen in 2005 fell between 90 and 130 to the dollar, while the 225-issue Nikkei stock average was projected at 24,000 at the highest and 9,000 at the lowest.