The recovery in consumer spending is in its infancy. Retail growth in real terms has been the weakest in 12 years and is just picking itself up from the bottom. The car market is still weak, with seasonally adjusted sales falling 2 per cent in March after a 2 per cent fall in February.

The consumer can pop for a spree now and then, but spending at its basic level is pressured by a negative savings rate.

We'd like to combine our overall upbeat analysis of consumer spending and retail activity with our baby boom spending thesis. And this is basically grounded on the observation that baby boomers tend to spend more on quality of life and personal indulgences than their parents did when they were at the same age.

During fiscal 2006, we expect the retail market to remain extremely competitive and tighter consumer spending to continue for at least the first half.

What we are starting to see are the motors running. Momentum is very important in any recovery and that is what we are starting to see in Japan at the moment.

A chain is only as strong as its weakest link