Situation of Japanese economy

The total market value of the Tokyo Stock Exchange's First Section has temporarily surpassed 591 trillion yen, exceeding the previous highest level marked in December 1989. We do not think the current stock market is overheating. The recent trend comes against the backdrop of factors such as the correction of the excessive rise of the yen and the price of crude oil staying at low levels, but it shows that investors appreciate the strengthened earning capacity of companies. It is also notable that there are some companies that have posted their record-high profits. Keidanren has called on companies to get rid of their deflationary mindset, promote proactive management and create new growth opportunities. We see that this kind of move is steadily spreading among management, and that is starting to be reflected in stock prices. It is hoped that stock prices will continue to perform firmly.

We understand that the economy is generally heading in the right direction. Japan's real gross domestic product (GDP) has been positive for two consecutive quarters. The real GDP grew 2.4% on an annualized basis during the January-March period compared with the previous quarter. While personal consumption is still not showing a strong recovery, we think the effects of wage increase this spring will start showing from April on.