It started with US and after the worldwide financial turmoil, now its Japan, that has fallen into recession. Japan, the second largest economy has faltered in this global crisis, as admitted by the Japanese government.
Financial crisis has spread to the major Japanese industries. With the European and the US auto and electronics industries going awry, the exports have plunged further. Toyota’s decision to provide zero percent financing in Europe, and to cut the production of LCD television and not to mention the crisis in the real estate is yet another proof of the economic recession catching up on Japan as well. But will the global slowdown, will it be possible to persuade the companies or consumers to borrow more money?
Analysts are of the view that there will be a cut on the winter bonuses as well, affecting the consumer spending at large. Japan’s recession was more than the experts had actually expected, with 0.4 per cent drop in the GDP this year. This figure is second to that of the United States. Stocks in Nikkei were trading about 0.7 per cent higher this morning as cheap stocks were bought by investors.
After massive job cuts , unemployment and poverty are an evident aftermath. The Japanese recession was not unexpected especially after the value of the yen skyrocketed in the recent weeks. Exports have been worst affected. The ripple effects of this will be seen in the US, European and other major exchanges worldwide.
Via: WSJ
