TOKYO (Nikkei)--Concerns about a double dip in the economy appear to be weighing less on the minds of business leaders compared to six months ago, according to the results of a quarterly survey conducted by Nikkei Inc.
A total of 34.2% of respondents said they see a double dip as an on going risk, a 6.7 percentage point decline from the 40.9% who saw such risk in March. On the other hand, 25% said they see "almost no" risk of a double dip, while 3.6% said they see "none."
But some respondents warned that conditions were still uncertain. "The domestic economy could continue treading water," warned a top executive at a major nonlife insurer. The chief of a major homebuilding company also asserted that domestic conditions could depend on "political developments and fiscal policy."
Among the 2.1% who pointed to "considerable" risk of a double dip and the 32.1% who cited "some" risk, the largest percentage, 39.5%, predicted it could occur this year, in the October-December quarter, while 31.2% said the first quarter of next year. Respondents thought the main catalyst likely to trigger another downslide would be "fiscal woes in Europe," cited by 77.1%.
Meanwhile, nearly 60% of bosses said the impact of the yuan's appreciation, resulting from the Chinese government's plan to allow the currency more flexibility, on their operations has been "minimal" so far. A mere 0.7% cited the currency's strength as "a major minus," while 17.9% said it was a "slight minus."
And the percentage of chiefs citing excessive facilities at their companies improved to 22.9% in the latest survey compared to a previous 37.3%. A total of 49.3% said they would focus their fiscal 2010 capital spending in Japan. But the emphasis on emerging markets was made clear by the 23.6% who will spend in "China and other regions in East Asia."
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