Business investment in Japan declined for five consecutive quarters through end-1998, with the decline for 1998 as a whole being about 11¼ percent. Despite the pickup in the first quarter of 1999, surveys of business investment intentions and monthly orders data point toward renewed declines later in the year. The decline in business investment was more precipitous than during any other episode in Japan’s postwar history; even with the recent increase, business investment has declined by almost 20 percent between the first quarter of 1997 and the first quarter of 1999.