Friday, December 26, 2008

Japan Industrial Production Slumps And Outright Deflation Draws Nearer

Japan’s recession evidently deepened even further in November as industrial output fell at the fastest pace in 55 years. Production plunged 8.1 percent month on month from October (Trade Ministry data) and was down an enormous 16.2% year on year. For an economy which lives from the prowess of its industrial exports, this is simply earthquake.The decline in production was the largest since data

Monday, December 22, 2008

Japan's Exports Fall Sharply In November

Japan’s exports fell the most on record in November, as global demand for cars and electronics collapsed, suggesting that more factory shutdowns and job cuts are likely as the recession deepens. Exports fell 26.7 percent from a year earlier, according to data from the Finance Ministry today (Monday). This was thus the largest fall since the data was first published in 1980.Exports to the U.S.

Did (or Didn't) Japan Just Re-introduce Quantitative Easing?

With the US Federal Reserve now adopting what is widely regarded as some variant of quantitative easing (QE), and with the Bank of Japan cutting interest rates amidst economic conditions which BoJ Governor Masaaki Shirakawa describes as "severe", perhaps it is worth taking time out to have a looking at some of the earlier experience of quantitative easing in Japan, in order to ask ourselves why

Saturday, December 20, 2008

Bank exposure to US credit problems

Aozora Bank..."Aozora Bank Ltd., a midsize Japanese bank, said Tuesday it has up to 12.4 billion yen ($137 million) in indirect exposure to the massive Ponzi scheme run by Wall Street money manager Bernard Madoff...the development represents an unneeded distraction for the struggling lender, whose top shareholder is U.S. private-equity fund Cerberus Capital Management."US GSE's..."Japan's

Friday, December 19, 2008

Japanese government plans stock market action

Japan plans to buy $227 billion in shares to boost marketBy Michael Kitchen8:11 a.m. EST Dec. 18, 2008NEW YORK (MarketWatch) -- "Japan's government said Thursday it is submitting a bill to parliament allowing for the purchase of 20 trillion yen ($227 billion) in stock to help stabilize the Japanese stock market, Kyodo news reported.Under the bill, the Banks' Shareholding Acquisition Corporation,

Thursday, December 18, 2008

Thoughts on deflation in Japan

The benefit from the negative energy price shock should provide some boost to domestic consumption. On the other hand, the rise of the yen versus the dollar to more realistic levels is no doubt more than offsetting the benefit from the fall in oil prices. At this point, I think the Japanese authorities are unable to do anything meaningful to weaken the yen. Also, the bulk of Japan's exports are

Tuesday, December 9, 2008

Japan's Contraction Is Evidently Far Worse Than Previously Estimated

Today's comments by Bank of Japan Governor Masaaki Shirakawa that conditions in Japan's economy are severe and that monetary conditions are rapidly tightening should not be taken lightly in my opinion. Viewed alongside last weeks data revision which showed that Japan’s gross domestic product contracted much more rapidly in the third quarter than initially thought, and the recent admission by