Japan Economy's Crash & Recovery

[Hanshin-Tigress]

so what? This is good for china. Many chinese are very poor etc and their booming economy is GOOD. It will help many chinese live happy and productive lives. This is no competition. Also please remember that japan is a nation of 127 million and china is a nation of 1.3 billion so china still has a long way to go. Even if china's GDP is twice as big as japans it doesnt mean the average citizen will be richer.

What is the problem if china surpasses japan? Does it really matter?

[Ryuhei]

Yup, bad quarter. Japanese GDP declined 0,3% in April-June quarter from Q1.
Hopefully, Q3 will be much better. Today, new data show that Japan´s core private-sector machinery orders jumped 17% in July
from the previous month.

[Whiteeclipse]

Originally Posted by Meosaigon

different level? We don't count history into account. What is going now in the current world and now is the most important and the clearest evidence ... China is taking over Japan and it will be soon no longer the second biggest economy in the world.

Do you really expect Japan to be the second biggest economy in the world forever, Japan has 127 million and declining population every year. China has 1.3 billion people and India has 1.1 billion and both of their GDP is growing extremely while Japan had 1.2% decline in 2Q GDP.

http://www.newratings.com/analyst_ne...e_1607968.html

[Whiteeclipse]

Can anyone tell why Japanese economy is having problems, is it because it's too dependent on exports, aging population is retiring and there are no employees to take the jobs or ????????

[Whiteeclipse]

Originally Posted by Maki-chan

so what? This is good for china. Many chinese are very poor etc and their booming economy is GOOD. It will help many chinese live happy and productive lives. This is no competition. Also please remember that japan is a nation of 127 million and china is a nation of 1.3 billion so china still has a long way to go. Even if china's GDP is twice as big as japans it doesnt mean the average citizen will be richer.

What is the problem if china surpasses japan? Does it really matter?

Japan is going to benefit from the rise of China and it's going to be Japanese top export market.

[Whiteeclipse]

Originally Posted by Meosaigon

according to the propensity of the world economy, I would think China will soon overtake Japan .... which is really sucks ..

Why would it suck?

[dattebayo]

Originally Posted by Ryuhei

Yes, yes, of course, 2,6% is a healthy growth. Japan has been growing at between 2% and 3% anually since 2003, and that´s really good.

I only say that a possible worldwide economic slowdown could affect that 2,6% prediction, lowering it to 2% or 2,2%.

japan is a developed country. the gdp can't grow higher than 4%

[Whiteeclipse]

Originally Posted by shippuden

japan is a developed country. the gdp can't grow higher than 4%

I wasn't talking about the slow growth which I know a very developed economy grows about 2-4% a year but I was asking why the Japanese GDP was declining, 2004 it was 4.6 trillion and 2006 was 4.3 trillion.

[Ryuhei]

Originally Posted by Whiteeclipse

I wasn't talking about the slow growth which I know a very developed economy grows about 2-4% a year but I was asking why the Japanese GDP was declining, 2004 it was 4.6 trillion and 2006 was 4.3 trillion.

Because of deflation. Production is expanding, but not the monetary value of that products. Also, the weaker yen, and the stable population.

[HirakataShi]

The problem isn't a lack of economic activity. Unemployment keeps dropping - it's at 3.9% at the moment, well below other G8 economies and lower than China and India. The value of the output keeps declining though due to deflation.

[hkskyline]

BOJ sticks to view economy expanding moderately

TOKYO, Sept 19 (Reuters) - The Bank of Japan said in a monthly report on Wednesday that housing investment is falling, but it kept its overall assessment of the nation's economy unchanged.

The central bank also said a rise in wholesale prices is likely to slow, but it maintained its view in the report that consumer prices will likely rise in the long term.

[hkskyline]

Japan's new PM opts for stability with top economic team

TOKYO, Sept 25, 2007 (AFP) - Japan's new Prime Minister Yasuo Fukuda on Tuesday kept on his predecessor's finance and economy ministers, leaving analysts cautious about prospects for further free-market reforms.

Fukuda, who has vowed to continue economic reform while easing the pain of rural areas, retained Finance Minister Fukushiro Nukaga and Economic and Fiscal Policy Minister Hiroko Ota along with Akira Amari, the trade minister.

Nukaga, 63, a former defence chief, has been in his post for barely a month. Ota, a 53-year-old former professor, was tapped last year by then prime minister Shinzo Abe, who formally resigned Tuesday after a disastrous year.

Both have pledged to stay true to free-market reforms, but many analysts doubt whether the new government has the appetite to push through painful public spending cuts after a recent upper house election defeat.

Like Abe, Fukuda's claim to support free-market reforms is "hollow," argued Richard Jerram, chief economist for Japan at Macquarie Securities.

"For the past two years, the focus has been on the problem of inequality, which is likely to remain a barrier to many pro-market reforms," he added.

The world's second largest economy is in the midst of its longest recovery since World War II, according to the government.

Japanese business leaders called for Fukuda's administration to carry on the free-market reform drive in the country.

Masamitsu Sakurai, head of the Japan Association of Corporate Executives, told reporters: "We feel the new cabinet is swinging back a bit in the efforts of structural reform.

"We strongly hope the new government will address and carry out policies toward continuing structural reforms."

Fujio Mitarai, chairman of the influential Japan Business Federation and president of high-tech giant Canon Inc., said: "I hope they will cooperate with opposition parties and carry out policies steadfastly to recover public trust in politics."

But the opposition, which seized one house of parliament in July elections, argues that reforms initiated under Abe's predecessor, Junichiro Koizumi, have hurt the social safety net and regional economies.

Koizumi set out to slash public works spending and break up the post office with its three trillion dollars in assets, which were used to bankroll often wasteful but politically popular public works projects.

Abe in contrast initially appeared to focus more on ideological goals such as educational and constitutional reform, even as polls showed voters were more worried about a perceived widening rich-poor gap.

Following the ruling party's drubbing in the July election that handed control of the upper house of parliament to the opposition, the new government is expected to slow efforts to reduce government spending, analysts said.

"Fiscal spending measures to shrink economic gaps will be a key issue ahead of the lower house general election, which might be held as early as the end of this year," predicted Toru Umemoto, chief forex strategist at Barclays Capital.

"Therefore, we see that there is an increasing possibility that the government will conduct expansive fiscal policy in the near future," he added.

While a slowdown in reforms would be viewed negatively in the long term, in the short run it could be positive for the yen as government spending is likely to spur economic growth and could make it easier for the central bank to justify raising interest rates again, Umemoto added.

[Ryuhei]

JAPAN AUGUST ECONOMIC DATA

- Trade surplus: + 288% on-year

- Industrial production: +3,4% on-year

- Consumer prices: - 0,1% on- year

- Unemployment rate: +0,2% (rate: 3,8%)

- Household spending: +1,6% on-year

- Retail sales: + 0,5% on-year

[hkskyline]

Bank of Japan's Fukui Upbeat on Economy
Monday October 15, 5:07 am ET

TOKYO (AP) -- Japan's economic recovery will continue despite lingering uncertainty over the global economy, Bank of Japan Gov. Toshihiko Fukui said Monday.

"Long-lasting economic growth on the basis of a favorable cycle led by production, income and consumption will continue," Fukui said at the opening of the central bank's quarterly branch managers' meeting.


"We will continue to aim to achieve sustainable economic growth with stability in prices, by appropriately managing monetary policy," he said.

Fukui noted that global financial and capital markets remain unstable due to the fallout from the subprime loan crisis, but said Japan's financial system as a whole remained stable and exposure would remain low.

He also said that Japan's exports are increasing on the back of the global economy's recovery, while corporate profits continue to rise and capital spending is also increasing.

On consumer prices, Fukui said the core consumer price index rate is expected to move around zero percent in the coming months, but will eventually follow a positive trend.

Fukui, whose remarks came after the central bank on Thursday kept its benchmark interest rate at 0.5 percent, did not give any signals on when the central bank might raise interest rates next.

Some market players speculate the central bank may raise rates as early as in December.

Also Monday, the bank said Monday the economy is recovering or expanding in most regions of the country on the back of continued strong capital investment and high corporate profits.

Three out of nine regions slightly downgraded their economic assessment from July, the first time that three regions have lowered their economic assessments since the BOJ started releasing the regional report in April 2005. The other six regions left their assessment unchanged from July.

[hkskyline]

Wednesday October 17, 9:45 PM
IMF downgrades Japan's economic growth outlook

WASHINGTON (AFP) - The IMF on Wednesday cut its growth forecast for Japan's economy for this year and 2008, warning that a global downturn and a stronger yen could further hinder the recovery.

The International Monetary Fund called on the central bank to refrain from rapid interest rate rises as the world's second-largest economy takes longer than expected to decisively beat years of deflation.

It also renewed its call for Japan's government to tackle the ballooning national debt.

After shrinking in the second quarter, Japan's economy is now expected to grow by 2.0 percent this year and by 1.7 percent in 2008, after a 2.2 percent expansion in 2006, the IMF said.

In July the IMF raised its growth forecast for Japan to 2.6 percent in 2007 and to 2.0 percent in 2008.

While business confidence remains solid and unemployment low, household consumption appears more subdued, the IMF said in its twice-yearly World Economic Outlook.

Recent volatility on global financial markets has clouded the outlook for Asia's largest economy and could lead to a stronger yen, even though Japan's exposure to US mortgage problems appears to be limited, it said.

There was a risk that growth might even miss the downgraded forecasts, warned the IMF, which also slashed its projection for US growth in 2008.

"While faster wage growth could boost consumption spending, growth would be dampened by a more significant downturn in the global economy, higher oil prices or a further appreciation of the yen," it said.

Japan's recovery stalled in the second quarter of 2007 when the economy contracted because of a drop in corporate capital investment and weaker growth in household spending, the IMF noted.

It also voiced caution over lingering deflationary pressures after renewed falls in Japan's consumer price index (CPI) in recent months.

"Despite four years of robust growth, deflation has yet to be decisively beaten," it said.

"While the decline in consumer prices is likely to be reversed in the period ahead as higher energy prices feed into the CPI, prospects for a decisive move to positive inflation remain elusive."

The IMF attributed the slower-than-expected exit from deflation to increased productivity by Japanese companies, the negative impact on wage growth of the retirement of post-war baby boomers, and consumers' low inflation expectations.

It urged the central bank to give the economy more time to return to inflation and for financial market volatility to subside before it hikes its super-low interest rates again.

Japan's central bank last year ended an unprecedented era of zero interest aimed at defeating deflation and raised borrowing costs for the first time in almost six years.

It hiked rates again in February to 0.5 percent but has left them on hold since, amid a backdrop of falling consumer prices, domestic political uncertainty and volatile financial markets.

Market views are mixed on when the next rise in Japanese interest rates will come, with some analysts predicting a possible hike in November or December.

The IMF renewed its call on the Japanese government to tackle the massive national debt -- the biggest among industrialised nations -- warning that the pace of fiscal reform looks set to slow.

"A broad reform of the tax system that includes steps to widen the income tax base, raise the consumption tax rate and strengthen tax administration would provide the basis for higher revenues," it said.

Japan's debt mushroomed as the government spent trillions of yen to try to kickstart growth after the "bubble economy" burst in the early 1990s, but the ruling party has been reluctant to raise the politically sensitive sales tax.

[Ryuhei]

Originally Posted by hkskyline

WASHINGTON (AFP) - The IMF on Wednesday cut its growth forecast for Japan's economy for this year and 2008, warning that a global downturn and a stronger yen could further hinder the recovery.

The International Monetary Fund called on the central bank to refrain from rapid interest rate rises as the world's second-largest economy takes longer than expected to decisively beat years of deflation.

It also renewed its call for Japan's government to tackle the ballooning national debt.

After shrinking in the second quarter, Japan's economy is now expected to grow by 2.0 percent this year and by 1.7 percent in 2008, after a 2.2 percent expansion in 2006, the IMF said.

In July the IMF raised its growth forecast for Japan to 2.6 percent in 2007 and to 2.0 percent in 2008.

While business confidence remains solid and unemployment low, household consumption appears more subdued, the IMF said in its twice-yearly World Economic Outlook.

[...]

2.0 for this year? After the Q1 weakness, I´m waiting for this quarter´s GDP.


It seems that IMF downgraded growth for almost every country.
From: http://news.bbc.co.uk/2/hi/business/7049304.stm
The IMF expects the US to see a particularly sharp slowdown in economic growth next year.

It now predicts the American economy will expand just 1.9% in 2008, compared with its previous forecast of 2.8%.

In Europe, it is projecting that the UK economy will slow to 2.3% in 2008 from 3.1% this year, while Germany's growth will slip to 2% next year from 2.4% for 2007.


For Spain, IMF predicts 2008 growth at 2,7% (previously 3,4%).

[Ryuhei]

Double post, sorry

[Blackraven]

I blame it on higher oil prices (now at $90 per barrel). Brent crude, Dubai light sweet crude, Mean of Platts Singapore and West Texas Intermediate are on all-time highs.

Nevertheless, this should not affect Japan that much (once the biofuel initiatives begin over there).

Yet even so, I hope Japan addresses its balooning debt.

"It also renewed its call for Japan's government to tackle the ballooning national debt."

Which represents OVER 100% of the nation's GDP. Damn. Fukui better do something asap and achieve balanced budget by end-2010.

[hkskyline]

Japan's exports to Asia fuel record trade surplus
25 October 2007
The Wall Street Journal Asia

TOKYO -- Japan posted a record trade surplus for September on strong exports to Asia and Europe, underscoring how exports are supporting its economy, as domestic data are mixed.

The merchandise-trade surplus, or margin by which exports exceed imports, grew by 62.7% in September from a year earlier to 1.638 trillion yen ($14.25 billion), the widest it has ever been and better than the 45.1% expected by economists surveyed by Nikkei and Dow Jones Newswires.

Strong exports of communication devices, cars and car parts to Asia and Europe helped widen the surplus for the second-straight month, according to preliminary data the Finance Ministry released yesterday.

The sharp growth in the surplus came even though exports to the U.S., the biggest market for Japanese goods, tumbled.

"Japanese exports remain on a growth path despite recent market confusion triggered by U.S. subprime-loan jitters," said Hideki Matsumura, a senior economist at the Japan Research Institute.

Japan's trade surplus with the U.S. shrank by 13.2% as exports fell 9.2%, marking the first decrease in five months, amid falling exports of cars and construction machinery. But exports to Asia jumped 58.7%, with parts for communication devices especially strong, as exports to Europe rose 26.4%, the Finance Ministry said.

Another reason for the fatter surplus was the 3.2% fall in imports, marking the first decrease in 43 months. Economists said the fall in imports was mainly because of statistical factors, one of them being that September had fewer business days than normal.

Economists said weak U.S. demand is cause for concern. Exports of construction machinery to the U.S., a category related directly to the housing sector, fell 32.4%. But exports in this category have been falling for nearly a year.

"The data reflect weakness in housing investments, which is likely to continue in the near term," considering recent subprime-mortgage-market problems, said Kaori Yamato, an economist at Mizuho Research Institute. Adding to the slowdown in U.S. housing, decreasing car exports suggest an overall weakening in the U.S. economy.

But despite the negative U.S. outlook, economists said exports to other places will continue to fuel the surplus, supporting the overall Japanese economy.

Exports are key to Japan's economic expansion, especially as mixed domestic data are raising concerns. Japan's gross domestic product for the April-June quarter contracted for the first time in three quarters, decreasing a price-adjusted 0.3% from the previous quarter, while housing starts fell 43.3% in August and are likely to weigh on third-quarter growth.

"For now, we see a trend that strong exports to Asia and Europe are balancing out any losses made in the U.S., and this is likely to continue for the next few months," said Taro Saito, a senior economist at NLI Research Institute.

But if U.S. economic jitters continue, "weak U.S. consumption may result in shrinking U.S. economic growth, which could then spill over to other global economies," he said.

---

Tomoyuki Tachikawa contributed to this article.

[chc_cac]

simply put nation comparison is like competing mobs
why would you identify with the winner?

can someone please explain in layman terms why nations cede to a global banking organization?