Where is the economy going?

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I am hearing two different voices out there with regard to Japan and the economy. It is going to be interesting tonight when Jesper Koll comes to Nagoya to share with us his thoughts.

Our clients and many of the people I speak to in the foreign community recently have indicated that things have definately picked up in Japan in the last 2 months. For our housing and relocation business this is also true. However, this is supposed to be our busy period of the year anyway, so I am a little skeptical to believe that we are out of the worst yet. But, things definately are better than they were.

Many are saying that after the Obon Holiday shut down, we are really going to see things start to take off again. I was talking to the head of a recruiting company a week ago, and he commented that while some companies have already begun to recruit again, he felt that many will start recruiting in earnest after getting Obon out of the way.

This all sounds great, but on the other hand we have economists pointing out that the rise in the Japanese stock market index is "artificial" or "inflated" and that the steady increase has no justified foundation or basis. I would point out that alot of it would seem to be more confidence that Japan is getting better, this factor alone being one of the big reasons why Japan's economy has shrunk so much in the last 6 months. Too much media gloom! So, maybe this is "artificial confidence" I am not sure, but when you do take a look around there are alot of things that are still not happening; banks are not lending, companies are still cutting expenses and people where they can, companies continue to go under at the highest rate in 6 years, etc. So I can certainly see why some economists would choose to say we are not out of things yet.

So, which is it? We are out of the worst and after Obon things will take off, or we are not out of the worst and after Obon there is going to be another downturn in the stock market..... Hopefully Jesper Koll will shed some light on things tonight, but I suppose only time will tell.