Brushing aside growing pessimism on the prospects for the Japanese and global economies, the nation's top business leader said Monday he expects Japan to pick up steam in the second quarter on the back on strong overseas demand in developing countries.
"The pace of the (domestic) economic expansion will accelerate after spring," Fujio Mitarai, chairman of the Japan Business Federation (Nippon Keidanren), announced at a joint news conference with other business leaders to mark the start of the new year.
While acknowledging the possibility of a U.S. economic slowdown, Mitarai said growth in China and other developing countries will help sustain expansion.
"Therefore, I hope exports will keep supporting (Japan's domestic) growth," said Mitarai, also the chairman of Canon Inc.
Mitarai expressed confidence that brisk corporate earnings will help improve the employment rate and eventually revive consumer spending.
Growing worries over the U.S. economy have pulled down Japan's share prices since the beginning of the year. After falling by more than 600 points Friday, the Nikkei average on the Tokyo Stock Exchange fell by another 190.86 points Monday to close at 14,500.55.
However, Mitarai insisted that stocks are being "oversold."
Masamitsu Sakurai, chairman of the Japan Association of Corporate Executives (Keizai Doyukai), concurred that the stock market is "overreacting" to uncertainties over the U.S. economy.
"I hope the overreaction itself will not create a head wind against the economy," Sakurai said.
Tadashi Okamura, head of the Japan Chamber of Commerce and Industry, was more cautious about the economy's prospects, citing the clouds over the U.S. and European economies and high oil prices.
He also pointed to the slump in housing starts in Japan and continuing weakness of small and medium-size firms.
