Stock prices went up today in Japan, after seven straight losing sessions that took key stock indexes to lows not seen in nearly 20 years. The bounce came despite some less-than-encouraging news about the Japanese economy.
The benchmark Nikkei index moved up more than one-and-a-half percent, breaking a seven-day losing streak. It closed at 9,222 points. Market watchers attribute the buying partly to a report that Japan's government soon will announce a plan to fight deflation. That plan reportedly will include speeding up the disposal of bad loans that burden Japanese banks.
Investors Thursday seemed to ignore a spate of discouraging news about Japan's economy. Industrial corporate capital investment fell 15 percent in the second quarter compared with a year ago. The numbers are expected to have only a minimal effect on the revised gross domestic product figures for the same quarter due out next Wednesday.
Business sentiment among large companies stayed negative for a sixth straight quarter in the April-to-June period. But the Finance Ministry says sentiment is improving after bottoming out in the fourth quarter of last year.
The financial newspaper Nihon Keizai reports that the government may shelve a plan to impose a 10-million-yen limit on government guarantees on ordinary bank deposits. The limit is scheduled to go into effect next April. Currently, the government guarantees all individual bank accounts, no matter how large they are. Since many of Japan's banks are struggling, many Japanese are worried the restricted guarantees would endanger their savings.