Asian financial markets fell sharply yesterday in the wake of poor Japanese economic data, which further undermined the weak yen. A Japanese Ministry of Finance survey showed that in the first three months of this year companies experienced the sharpest year-on-year drop since the 1950s. The survey of business showed that revenues at Japanese corporations were 6.8 per cent down on the same period the previous year. This was the biggest fall since the survey started 40 years ago.
Pre-tax profits also tumbled 25 per cent on an annual basis, with manufacturers reporting a fall of 22.1 per cent, and non-manufacturers a decline of 27.7 per cent.
The decline in corporate revenues has damaged business confidence in Japan. According to the survey, the balance of companies reporting that they are optimistic compared with those pessimistic is at its lowest since it started.
The data have fuelled fears that first-quarter gross domestic product figures, due tomorrow, show the Japanese economy is in recession.
In Tokyo, the yen weakened to Y141.57 against the US dollar, and slipped further in New York trading to touch Y141 as the dollar strengthened on comments by Mr Alan Greenspan, Federal Reserve chairman.
In Paris, Mr Larry Summers, US deputy Treasury secretary, said that representatives of the Group of Seven industrialised nations had discussed the yen exchange rate and its possible adverse impact on Asia.
