Japan’s declining economy

03/06/2012
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TOKYO (majirox news) — Japan shows no signs of emerging from its recession, according to Hiromichi Shirakawa, chief economist of Credit Suisse in Japan. However, the government is attempting to make substantial steps to reverse the trend. Experts list high government debt, aging population and ongoing deflation for Japan’s problems.

“The government has been taking more serious steps trying to reverse the currency markets and try to weaken the yen,” Shirakawa said. “The BOJ, the Central Bank, is printing money more aggressively.”

However, it seems that the yen will continue to be strong, with the Americans and the Europeans also flooding their markets with new money.

“If the yen remains strong, Japan’s deflation is unlikely to come to an end,” Shirakawa said.

Another problem is the aging population, which will bring a decrease in technological innovation, consumer demand and manufacturing facilities. But there are solutions.

“One way to do this is probably to deregulate or open the labor market and try to increase immigrants from Asia and try to stimulate the services economy,” Shirakawa said. “Let’s say like medical or agricultural businesses.”

Joseph Nixon, CEO of the State Bank of India, says on the plus side, a strong yen allows ordinary Japanese to enjoy imported goods at lower prices and for Japanese companies to make overseas investments. But this has to happen quickly.

“Japan should act fast like Korea, Japan should take decisions, very fast and penetrate the economies like India where are a lot of opportunities for the Japanese to get high returns on their investments.”

For the ordinary Japanese public, though, it’s a question of tightening your belt, and toughing it out.

An employee of Japan Railways in Tokyo, says, “I have to look out for myself. For example, I reduce alcohol and cigarettes and eating out. In this way, I’m protecting myself from the current economic situation.”

Japan has problems, but they’re not going to cause the country to collapse overnight. However, Russell Jones, Global head of Fix Income Strategy at Australia’s Westpac Institutional Bank, told moneycontrol.com that there’s the possibility when an economy like Japan also has a high level of government debt, about 220 percent of GDP, all the factors are coming together for some sort of crisis.

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3 Responses to Japan’s declining economy

  1. Mark on 03/06/2012 at 10:13 pm

    Importing foreign workers may help the Japanese economy in the short term, however in the long run it will destroy the culture and society of the most civilized country in the world.

    • Mack on 03/07/2012 at 3:59 pm

      “Importing foreign workers may help the Japanese economy in the short term, however in the long run it will destroy the culture and society of the most civilized country in the world.”

      Wow, such a narrow-minded, egotistical comment. Regarding immigration and the economy, Japan’s Yoshida Doctrine policies that worked so well in the late 20th century (particularly resistance from foreign direct investments) are causing companies to look elsewhere for profits in a globalizing world. Japan needs to relax its immigration laws instead of importing workers, but putting restrictions on their ability to live within the country. Japan’s anti-discrimination laws are ambiguous, its government is continually inept regardless who is in power (DPJ or LDP), and their solution so far has been to ask the future generation to should the blame (as Yoda did in a recent speech). The problems plaguing the country are domestic, and it starts at the top.

      Regarding the most “civilized country”, does this include women still being 2nd class citizens, a consistent, underlying xenophobia towards foreigners, and a country quick to play the victim card in its history while conveniently forgetting about its own crimes? (ie – treatment of Chinese/Koreans from WW2). Please be careful when defining what culture and society even is. Many foreigners who enter the country attempt to integrate into society and assimilate many facets of Japanese culture, particularly the language and customs. Would Japanese society change if there was an influx of foreigners? Absolutely, but it will not be “destroyed” in any sense; to think otherwise is ignorant at best and stupid at worst.

    • Jin on 03/07/2012 at 8:46 pm

      the most civilised country in the world?! you do know that you’re talking about a country that carried out the most unspeakable atrocities and crimes against humanity during WW2 and still denies that it ever happened? Despite being worse than the nazis in some ways, they completely whitewashed their history and tell lies to their children. they even have shrines dedicated to class A war criminals. Most civilised in the world? Dont make me laugh.

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