13 July 2006, 11:03  Japanese small, medium-size firms worried about interest rate rise

Small and medium-size companies are worried that a rise in interest rates will hurt their business performance, according to the results of a poll published the day before the central bank is due to decide whether or not to end its zero-interest policy. The results of the poll of 445 small and medium-size companies, which was commissioned by the Tokyo Shimbun newspaper, show that 88.9 pct think that a rise in borrowing costs will have a negative influence on their business prospects. And 19 pct expressed concern that an end to the zero-interest policy would cause "serious problems". Construction firms were the most worried, with 68.2 pct expressing strong concern. The Bank of Japan's policy board began today a two-meeting, with expectations running high that the central bank will raise interest rates tomorrow for the first time in nearly six years.

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