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WESTERN MARKETS UNEASY. Trouble rumbles in Tokyo

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Japan's hyperactive stock market is causing growing concern in the United States and Europe at a time when the global economy appears to be undergoing a shift toward higher oil and commodity prices. ``We're in a major trend change,'' says David Hale, an economist at the Kemper Group, a Chicago-based mutual fund company. ``It's potentially hostile to the Japanese economy.''

The biggest problem for Japan: rising costs for raw material, especially oil. Another negative: the strong yen, which is slowing Japanese exports.

If these two trends persist, economists say, Japan could see the cash flow that fueled its robust 1980s growth - and that drove its stock market to dizzying heights - severely crimped. That causes concern among financial hands worldwide.

This is because the major stock markets around the globe are increasingly interconnected, and Japanese investors (mostly insurance companies and pension funds) have parked billions of dollars around the world in other markets. Since much of the speculation on the Japanese stock market has been fueled with borrowed money, a big drop in the Nikkei index could force margin calls on Japanese institutions, meaning they would be asked to come up with more of their own money to back the loans. They might sell assets abroad to do so, and that could affect other markets.

With the Nikkei average (similar to the Dow Jones in the United States) about 24,400 at this writing, everyone uses the word ``speculation.'' Even the Bank of Japan, that nation's stone-solid central bank, talks of transactions that are ``undoubtedly speculative.'' That's the kind of criticism Japan has heard before - and the market has kept on charging. But the consensus seems much more widespread this time.

Kenichi Ohmae, a veteran Japan-watcher with McKinsey & Co., an international consulting firm, writes in the New York Times this week that ``Japan, far more than America, is close to plunging into a depression.'' He says one of Japan's biggest problems is ``plenty of money - but nowhere to invest it except in more money.'' This has driven up the stock market, the property market, the art market, and even frivolous areas such as membership fees at Japanese golf courses, which are now traded like seats on a stock exchange and cost $100,000 to $2 million each.

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