Japanese Economy in Terminal Decline

verfasst von JüKü, 02.10.2001, 09:54

Von Stratfor.com:

Japanese Economy in Terminal Decline
October 28, 2001

Summary

The Sept. 11 attacks on the World Trade Center and Pentagon did more than just gut American confidence. They also heralded the downfall of the world's second-largest economy, Japan. About the only option left for the Japanese prime minister is to restart massive deficit spending.

Analysis

New statistics from Japan show that consumer prices dropped 1.2 percent in August, the 24th-straight month of decline. The data indicate Japan's deflationary spiral is intensifying. But Tokyo's problems are far more severe than economically crippling deflation.

About the only option left for Japanese Prime Minister Junichiro Koizumi to stop the economic degradation is to restart massive deficit spending, even though it may appear self-destructive, as soon as possible. Japan's economy has been extremely weak for more than a decade. But due to the Sept. 11 terrorist attacks in the United States, the country is now locked into an irreversible and terminal decline.

With its own people unwilling to spend, Japan is dependent on foreign consumers, particularly Americans, to sustain itself. To keep its exports flowing, Japan also repeatedly intervenes in the currency markets to keep the yen artificially low.

Such actions have made Japan hostage to international events. It has already completely tapped out monetary and stimulus policies as viable options. Now its federal debt, a nearly $6 trillion behemoth that makes America's 1980s debt seem small in comparison, is so high that industry-boosting tax cuts are no longer possible either. Adding to the misery, Japan's Nikkei-225 stock exchange is at an 18-year low, having shed 30 percent of its value in the past nine months.

The country's banks are helpless as well. Their capital adequacy ratio is estimated at a mere 1.4 percent, the Economist reports, following numerous bailout plans that required no one to take responsibility or truly write off losses. International banking rules require an 8 percent adequacy ratio.

The downturn still won't be fatal as long as foreign demand for Japanese goods remains high. Throughout the 1990s the United States, Japan's largest export market, was in the midst of its longest economic boom ever. The 2001 slowdown threatened Japan's precarious perch, but with the United States poised for recovery in the third quarter, there was a light at the end of the tunnel. Sept. 11 changed all that.


Quelle: http://www.stratfor.com/home/giu/archive/100101.htm
(dort auch weitere Links zu Japan)

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gesamter Thread:

• Japanese Economy in Terminal Decline - JüKü, 02.10.2001, 09:54
  • Aus EWT Sicht.... - Wolfgang, 02.10.2001, 10:25
    • Re: Aus EWT Sicht.... / Nikkei - JüKü, 02.10.2001, 11:35