The last time Japan had faced wrath of recession was way back in 2001. Japan has registered contraction of the economy in previous two quarters. Like other major economies of the world, Japan is also facing economic turmoil. The predictions for coming future are also not that bright.
In the April to June quarter Japan had registered 0.9% contraction in the economy whereas in the third quarter the percentage is 0.1%. Country is, in fact bracing up for further slowdown because of the effects of western economies. More so, European crisis shows no sign of revival as of now and that further increases the chances of Japan going through even tougher times.
Japan’s share index, Nikkei has lost more than quarter of its value in last three months. The country has also been affected because of falling exports and soaring currency rate. The demand for Japanese goods has slowed down considerably in last year.
The country’s shrinking economy is another reason of headache for its people. Addressing the problems faced by economy, the Bank of Japan had implemented rate cuts in line with steps taken by other countries.
Japan also announced two economic stimulus packages in two consecutive months. Others measures taken include, tax cuts, increasing loan guarantees for smaller companies and cutting highway tolls. Financial authority has also announced an expansion of tax-exempt housing loans to enhance the besieged property market apart from support for unemployed young people and special provision for care of children.
Japan is also facing negative growth because of pessimistic consumer confidence and low domestic consumption. The spending has reduced drastically. Two months back Nikkei fell to its all time low in 26 years. So, the situations are not that bright but at the same time the inter-linking of world economies will ensure revival of Japan as and when world gets back to the old form.