Japanese investors are braced for further stock market losses, with some analysts forecasting the Nikkei Average could fall below 8,000. In 2002, Japanese stocks plunged to 19 year lows, sliding down to 8,197. Shares were hit by concerns over mountains of bad debts in the country's banking system and the ailing economy.
Many analysts predict the market, reopening Monday after a New Year break, will trade between 8,0000 and 12,000 this year. But they warn that it could sink lower, if there is a U.S.-led war with Iraq, or if tensions grow with North Korea over nuclear weapons development.
Japan's business leaders are also concerned about the outlook for 2003.
Fujio Cho is the president of Toyota Motors, says it is unclear how the economy will fare for the first half of the year, but he expects it to improve in the second half.
Hiroshi Okuda, chairman of the Japan Business Federation, suggests that new measures are needed to boost stocks and revitalize the economy. He says the main goals for 2003 are to halt deflation and clean up the non-performing loans.
Mr. Okuda also proposes a controversial hike of Japan's 5 percent consumption tax on goods and services to help lower the budget deficit.
Japanese Prime Minister Junichiro Koizumi used a New Year's day address to restate his commitment to reforms, asking the country to bear with tough economic conditions, for now, as the government presses ahead with restructuring plans.
Meanwhile, to help bring more cash to the Japanese capital and other cities, more than a dozen mayors and governors are calling for the legalization of gambling casinos. The Tokyo government estimates that building casinos could net $730 million in profits, $180 million in tax revenue, and create 14,000 jobs.
A tax panel set up by the prime minister is studying the feasibility of the idea, and about 40 lawmakers from the ruling Liberal Democratic Party have created a team to promote the idea. Although the law currently prohibits public gaming and betting, the lottery is popular in Japan, as are other forms of gambling, which exist through legal loopholes.