It has become March, and the fresh fragrance of flowers fills the air.

A few weeks ago, while I was on a business trip in Chicago, I managed to meet my son who is a
junior in college, and we had dinner together. My son was in the U.S. joining his water ski team,
which had a training session scheduled in Miami.
Even though we were in a different place than usual, we were able to talk about a lot of things.
I was surprised by his conviction of speaking, convinced he was all grown up.

At that time we were discussing the Japanese Federation of Economic Organizations report on the
status of Japan. This report, which is sometimes known as "Mitarai Vision".
Of course, my son did not know of this completely, but so do a lot of people, so I want to share
the explanation with you all:

It has been said that due to the collapse of the "bubble" economy, the end of the Cold War, and
Globalization, that the Japanese economy had been in a slump for a period of 10 to 15 years.
Prime Minister Koizumi initiated regulatory reforms to promote private sector vitality and increase
public investments and rallied the Japanese economy.

Since 2002, we have experienced 4 consecutive years of growth and prosperity.
What is important to remember here is the vitality of the private sector is what has grown.
There is no need to worry about the camphor of public utilities running out. As for the United
States, the 90's were an economic boom period and for England, they have experienced 15 years
of consecutive growth. As for Japan, one more round of restructuring to create a more efficient
economic growth engine should be established.

Labor Market Reforms
- Preserve Life-Time Employment, but discard the "Seniority Based on Length of Employment" system.
- Moving towards a wage system that converts the wages to be paid for duties one actually accomplishes
- Important to establish a "scope" of responsibilities for all employees

Regional Necessity of Local Economies
- For some areas that already have an abundant amount of enterprise, they will continue to flourish,
those which do not have enterprise will decline.
Localities and regions should join together to form "business spheres of influence" and tackle business
strategies together.

Public Security Reforms, Agriculture Reforms, Economic Restructuring
(Corporate Tax Reductions) etc.
- Without doubt, the Japanese economy can grow at a rate of 2.2% per year, and at a nominal increase of 3.3%.
At this rate, the Japanese person's income per person can increase by 30%.

For a country low in natural resources, imports are a very important factor for Japan.
As manufacturing is 20% of overall GDP, 90% of those manufactured are results of earnings
gained by exports overseas. This means an economy comprised of a 70% service industry
makeup will surely dip into the red before long.

As a leader in the exportation of manufactured goods and services, "Mitarai Vision" is important
for all of us. For YAMASHIN-FILTER CORP., as a member of this group, we must all make an
individual effort to continuously improve our enterprise.

As always, Thank you for your patronage of YAMASHIN-FILTER CORP.

Atsuhiko Yamazaki
President
YAMASHIN-FILTER CORP.