TOKYO — In his three decades running the Japanese operations of Louis Vuitton, Kyojiro Hata has seen the peaks and valleys of Japan's economy. For the last 15 years, it's been all valley.
The collapse of the Japanese bubble economy of the 1980s was not so much a bang as a long hiss that saw the air go out of real estate prices and consumer spending, with a dearth of new investment that even interest-free money couldn't cure.
Hata acknowledges that he is no economist, but his long career with Louis Vuitton in Japan -- the French luxury brand's largest market -- suggests an intuitive understanding of the local consumer, and he is now among the legion of observers who claim that the long-awaited Japanese turnaround is underway at last.
"It's coming back, definitely," he said as he prepared to launch a line of designer sunglasses at the flagship store on Omotesando, Tokyo's boulevard of brands.
Hata and a growing chorus of optimists like him have some measurable evidence on their side. Corporate profits are up; unemployment is down. Land prices in the big cities are inching higher again. And the stock market is booming -- the Nikkei index has nearly doubled in the last three years and reached a five-year high Friday, putting smiles on the faces of equities traders as bonus time approaches.
The stock market has been fueled in part by a banking sector that is almost clear of bad debts. Plus, investors see that the public sector is trying to shuck off its bad habits, particularly the cozy conspiracy among politicians, bureaucrats and industry to funnel public money to inefficient but politically expedient businesses.
Talk of a rebound has been heard before, of course. Economic indicators ticked up in the late 1990s, before Japan fell back, hard, into recession. But confidence that this recovery is the real deal stems largely from belief in the liberalizing economic reforms of Prime Minister Junichiro Koizumi.
In September, Koizumi won an election that he called before it was necessary, running an aggressive campaign built around the cry of "\o7kaikaku\f7" -- reform. The election was ostensibly Koizumi's way of shoving aside opponents to his privatization plans for Japan Post. The post office holds $3 trillion in savings and insurance assets that has long been a source of wasteful spending by profligate bureaucrats and politicians who oiled their local electorates with cash, roads and airports.
