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Uncertainty in Japanese real estate continues

Japanese retail investors remain skeptical on the news that Japan's two-year outlook is uncertain. A Reuters poll shows that investor outlook improved only slightly. Record numbers of investors are returning to old standards when it comes to investing. Many are putting money away in the form of bank deposits and government bonds. Japanese interest in overseas bonds and currency has even fallen. The Reuters poll, a gauge of investor sentiment, is compiled monthly. January's score of minus 60 is the lowest index achieved since the poll's inception. February's outcome was the second lowest.

Many of Japan's economic concerns stem from the sub prime mortgage market woes experienced in the U.S. Several housing markets around the world have experienced similar fallout due to credit problems in the United States. The stock market has also taken a hit, but has begun inching up from a two and half year low. Though the stock market may be on track, more then 50% of those surveyed in the Reuters poll say they will cut spending this year. Luxury goods are on the top of the list to be cut. The stagnate U.S economy is expected to continue to affect Japanese trading.

Several Japanese companies have been forced to revise their earnings forecast due to the high cost of raw materials and credit problems in the U.S. Due to their close ties, any slow down in the U.S economy will have a direct impact on Japanese firms. The poll did find that a small number of those polled feel that the Japanese stock market will return because the stocks are being undervalued. When investor confidence returns, less emphasis will be placed on banking investments and could lead to a profitable Japanese property market.

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