Biggs on Finance, Economics, and the Stock Market: Barton's Market Chronicles from the Morgan Stanley Years

Section 3C: Japan

More on Japan

October 25, 1983

Having just spent 10 days in Japan, I am now an expert eager to pontificate. I was part of a Nomura-sponsored group that visited with chief executive officers of a cross-section of Japanese companies, met with government officials, and listened to the views of private-sector intellectuals and economists. It was a very stimulating experience for a parochial investor like me.

For what it's worth, the sense I got was that the Japanese economy is beginning to do better, but even the optimists don't expect much more than 4 percent real growth over the next five years or so, which represents a considerable slowdown from the powerful secular growth rate of the past. The almost mystical combination that propelled Japan for so long—a very high savings rate, aggressive business leaders, a hardworking, disciplined work force, and a backlog of modern technology waiting to be exploited—is now fraying at the edges. The people want to spend more to live better and maybe do not want to work so hard. Japan has certainly caught up to the technological frontier, so the potential for huge returns from investment in known technologies is reduced. Infrastructure investments, like roads for all the cars, are now needed, and defense spending will be rising as a share of GNP. However, the business leaders seem as committed as ever, and I don't really see ...