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Fewer Japanese tax leases as economy slows
23 June 2009
Japanese tax leasing will undoubtedly come back but its recovery is dependent on the Japanese economy recovering, which could take some time.
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[Japanese operating lease]
[JOL]
[Japan]
[Calyon]
[Jose Abramovichi]
Tax leasing is suffering everywhere, but Japan has seen diminishing investor appetite over the past year.
While the figures for the 2008 financial year were not too dissimilar from the previous 12 months, equity and debt arrangers are expecting that the capacity for the Japanese operating lease (JOL) in 2009 will dwindle significantly.
The Japanese economy contracted by about 4% in the first quarter of 2009.Taking radical action, Japanese companies stopped spending, which led to falls in capital expenditure of about 10%. As people lost jobs and withdrew from consumer spending, Japan looked set to be stuck in a rut for a long time.
Reports suggest that the economy is growing again, with industrial production up and enjoying the boost it has received from government bailouts.
However, with airlines relying on corporates to invest in tax leasing to offset their taxable income, it could be some time until appetite...
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