Japan’s Recession Looks Worst Since WWII: S&P
TOKYO Japan’s recession looks set to be the worst since World War II with its economy expected to contract 4 per cent in 2009, Standard & Poor’s said on Thursday.
The outlook for Asia’s biggest economy “remains bleak with another annualised double-digit contraction expected” this quarter, the credit ratings agency said in a report.
“Japan now looks very likely to suffer its worst recession since World War II,” said S & P analyst Takahira Ogawa.
“The business climate for Japanese corporations is deteriorating dramatically amid a sharp decline in demand for products,” he said.
With corporate giants including Toyota Motor and Sony sinking into the red, “Japan’s manufacturing sector as a whole may record a fiscal year loss,” he warned.
Japan’s economy shrank at an annualised pace of 12.7 per cent in the fourth quarter of 2008, its worst performance since 1974. The government has already warned that the economic crisis is the worst since World War II.
Japan’s exports almost halved in January as recessions in many parts of the world pummelled demand for Japanese cars, electronics and high-tech goods. Political deadlock meanwhile has hindered efforts to revive the economy.
“Government action aimed at addressing the nation’s economic woes has been relatively ineffective,” Ogawa said.
“The government is hamstrung by the stalemate in Japan’s parliament... and by the nation’s weak fiscal position,” he said.
The report said Japan’s central bank may revert to a zero interest-rate policy in response to the threat of deflation. The Bank of Japan has already reduced its key lending rate to 0.1 per cent.
Meanwhile, Japan’s finance minister said on Thursday that a stable dollar was in the interests of Asia’s largest economy but downplayed the chances of Tokyo intervening to prop up the currency. “The US dollar is in fact the world’s base currency now and there’s nothing to replace it,” Kaoru Yosano said.
The outlook for Asia’s biggest economy “remains bleak with another annualised double-digit contraction expected” this quarter, the credit ratings agency said in a report.
“Japan now looks very likely to suffer its worst recession since World War II,” said S & P analyst Takahira Ogawa.
“The business climate for Japanese corporations is deteriorating dramatically amid a sharp decline in demand for products,” he said.
With corporate giants including Toyota Motor and Sony sinking into the red, “Japan’s manufacturing sector as a whole may record a fiscal year loss,” he warned.
Japan’s economy shrank at an annualised pace of 12.7 per cent in the fourth quarter of 2008, its worst performance since 1974. The government has already warned that the economic crisis is the worst since World War II.
Japan’s exports almost halved in January as recessions in many parts of the world pummelled demand for Japanese cars, electronics and high-tech goods. Political deadlock meanwhile has hindered efforts to revive the economy.
“Government action aimed at addressing the nation’s economic woes has been relatively ineffective,” Ogawa said.
“The government is hamstrung by the stalemate in Japan’s parliament... and by the nation’s weak fiscal position,” he said.
The report said Japan’s central bank may revert to a zero interest-rate policy in response to the threat of deflation. The Bank of Japan has already reduced its key lending rate to 0.1 per cent.
Meanwhile, Japan’s finance minister said on Thursday that a stable dollar was in the interests of Asia’s largest economy but downplayed the chances of Tokyo intervening to prop up the currency. “The US dollar is in fact the world’s base currency now and there’s nothing to replace it,” Kaoru Yosano said.
source: OMAN TRIBUNE
