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One to One with `Mr Yen` (Dr. Eisuke Sakakibara), former Vice Finance Minister Matthias Knab reports “live” from the IQPC conference in Tokyo: Dr. Eisuke Sakakibara, now a Professor at the Waseda University, was in his previous live as Vice Finance Minister known as ''Mr. Yen'' for his ability to sway the currency markets. At the conference, Akira Adachi, Chief Representative of Fortis Prime Fund Solutions interviewed Sakakibara-San.

According to Sakakibara, there is still a perception in the international community that Japan would not yet have overcome deflation, which is an erroneous perception. Japanese companies would be running at historical high profitability while continuing to grow. Possible interest rate hikes by the Bank of Japan would not have negative effects. He predicts one rate hike in August (with a slight possibility of that one taking place in June already), one by the end of the year and a third one by March 2008. The carry trade “will not cease”, and “common sense” would tell the Yen would continue to depreciate. However he sees no inflation threats, at most inflation would reach 0.5%.

Midterm, for the next two to five year, Japan’s economy would be in expansion mode. For example, most Japanese firms have not tackled cost-cutting options available through outsourcing. He mentioned he servers as director of an Indian Business Process Outsourcing (BPO) firm, and “there is not a lot of business yet from Japan”. On ......................

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