Japan relishes baby boom

Thousands celebrated the birth of the royal baby

The arrival of a new royal baby girl in Japan has boosted hopes of an economic revival.

Some observers are expecting the optimism sparked by the birth of the first child of Crown Prince Naruhito and Crown Princess Masako to encourage consumers to spend again.

Thousands of people flocked to the celebrations during the weekend, while shoppers queued to buy "royal baby" commemoration cookies and sake wines.

Already makers of baby-care products and baby clothes have enjoyed strong share gains over the last few months.

It is thought that the royal birth could spawn a baby boom in Japan.

Scepticism

However, some economists and investors have been sceptical about any baby-inspired boost.

"Consumption is slumping mainly because people are worried about keeping their jobs," said Shinichi Sato, senior economist at Tokyo-Mitsubishi Securities.

"That can't be helped by a baby being born," he said.

Yasukazu Shimizu, senior economist at Aozora Bank, added: "There is a chance that the royal baby impact might lift Japan's birth rate, and as a result, boost consumer spending."

"But the chance is not high," he added.

Economic struggle

The country's businesses are struggling to survive the toughest downturn in years and the economy is forecast to shrink this year.

In a sign that the baby euphoria may not last, shares in baby goods maker dipped on Monday as investors took profits.

Pigeon Corp, which has been up more than 50% in the past three months, attracted few investors during the trading session on Monday.

Hiroshi Sato, a market analyst at Cosmo Securities, said: "Investors who bought baby-related stocks on expectations for a royal baby took profits today."

Shares in Pigeon Corp closed down 300 yen or 19% at 1,270 yen and toy maker Tomy Co fell 85 yen or 4.4% to 1,840.