Do not understand, how someone would want owerweight yen in reserves..
Japan Economy Shrinks Again
Thursday, 3 December 1998
T O K Y O (AP)
THE JAPANESE economy shrank for the fourth straight quarter, continuing
to wallow dangerously in the nation's deepest recession in decades, the
government said today.
Japan's gross domestic product - the measure of all goods and services
produced in the country - declined by 0.7 percent in the three months from
July through September, compared to the previous quarter, the Economic
Planning Agency said.
The economy contracted at an annual rate of 2.6 percent, the agency said.
If the trend continues, the economy will shrink for the second consecutive
year - something the Japanese economy has not done since the end of
World War II.
The World Bank warned Wednesday that if the Japanese economy does
not turn around soon, the world economy faces a substantial risk of
plunging into recession next year, rather than undergoing sluggish growth.
Japan has been battered by Asia's financial meltdown, which has slashed
exports, long the mainstay of its economic growth.
Tokyo-based economists surveyed by Dow Jones Newswires had
forecast on average a 0.5 percent drop in GDP for the period from July
through September from the prior quarter.
The economy shrank by 0.7 percent for the April-June period, compared
to the previous quarter. That marked the third straight quarter of decline
and the worst record since the government began releasing GDP data in
1955.
Initially, the EPA had reported that figure as 0.8 percent but revised it on
Thursday.
Earlier this year, the government revised its initial estimate of 1.9 percent
growth for this fiscal year ending March 31 next year. It now says the
economy will contract by 1.8 percent.
Economic Planning Agency head Taichi Sakaiya reiterated today that what
actually happens may be worse than that prediction. But he said the next
quarter's results will likely not be as bad as today's figures.
The economy shrank by 0.7 percent for the last fiscal year ending in March
1998, its first annual drop since 1974.
Determined to prevent the recession from dragging on further, Japan last
month announced a stimulus package including public works spending and
income tax cuts. It is unclear when the effects of such measures will begin
to be felt.
The government has also passed a package of bills to bail out Japan's
many troubled banks. The banks were left with massive loans gone sour
leftover from the excessive lending and speculation of the 1980s.
The ensuing credit crunch has sent unemployment and bankruptcies
shooting to record highs. Consumer spending has been plummeting.
In recent weeks, various Japanese government officials have made
comments about some signs of an economic recovery. |
