The Coming Week in Asia: Japanese Gather at Shrines to Pray for Another Good Year

But hoping for self-sustaining economic recovery, politicians and bureaucrats are leaving little to chance.
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TOKYO -- Over the holidays, shopping malls may be the busiest places in the U.S., thronging with folks making Christmas returns and taking advantage of the after-Christmas sales. In Japan, there will be plenty of holiday-related activity as well, but rather than piling into shopping centers, the crowds will be gathering at the shrines dotting the archipelago.

Even though they don't consider themselves a religious people, the Japanese have a keen sense of propriety and tradition. Like their parents and grandparents before them, millions of Japanese will begin making trips to the local shrine, praying that 2000 will be at least as good as 1999. The mini-pilgrimages reach their crescendo on New Year's eve, when the flood of revelers is so great that

NHK

, the nation's quasi-governmental television authority, broadcasts the gatherings. It's usually one of the highest-rated shows over the holiday season.

No doubt the fund managers and traders headed to the shrines over the next couple of weeks will pray for another strong year for the financial markets. After a decade in the dumps, the benchmark

Nikkei

average has finally sprung to life. Fund managers and traders will be asking the god or gods of their choice for another year like 1999, in which the Nikkei has risen 31% and OTC shares have surged to 200.

Japan's government, facing a debt-to-GDP ratio of more than 100%, would like that, as well. While there is little doubt that politicians and bureaucrats will make their way to the shrines over the holidays, they will also leave little to chance. On Friday, at the request of Finance Minister

Kiichi Miyazawa

, the

Bank of Japan

intervened in the foreign exchange market for the 12th time since mid-June, guiding the yen briefly to 103.10 yen from 101.90 yen. By weakening the currency, the MOF hopes to make it cheaper for Americans and Europeans to buy Japanese products. If it costs a little less, maybe American consumers will go for a

Honda

(HMC) - Get Report

Civic rather than some Yankee make.

On the same day, Prime Minister

Keizo Obuchi

and fellow Cabinet members added their support, approving a record 85 trillion-yen draft ($825 billion) budget for fiscal 2000. All that money, Obuchi hopes, will kick the economy into a self-sustaining recovery, something that has eluded Japan for nearly 10 years.

The proposed spending, up 3.8% from last fiscal year, also mandates 32.6 trillion yen worth of new government debt to be issued. Bond traders, who fear a sudden rise in interest rates due to the flood of new supply, will look to the

Economic Planning Agency

for guidance on Monday, when it releases its economic outlook for 2000. The EPA will likely be optimistic for the year ahead, especially because of the money that will flow out of the budget and into the private sector; it will also caution the bulls about low consumer spending, however.

Investors hungry for Asian initial public offerings may want to look to China, where more than 20 state companies are planning to list on the

Stock Exchange of Hong Kong

in 2000.

China National Petroleum Corporation

, the nation's largest oil company, has confirmed that it has received an "approval in principle" from the exchange for a $7 billion IPO, which will be the largest public offering by a Chinese entity if completed. CNPC is also awaiting approval from the

NYSE

, though an offering in the U.S. will likely be more difficult. The firm has business ties to Sudan, against which the U.S. enforces sanctions due to allegations of state-run terrorism and human rights abuses.

CNPC officials may want to consider popping into a Japanese shrine and asking the gods for help. It certainly couldn't hurt.