Monday, 9 February 2009

Japan faces worst recession in half a century

There was more bad news for Japan today. From Bloomberg:

Orders for Japanese machinery fell for a third month in December and bankruptcies increased as businesses scrapped investment plans amid a collapse in exports and deteriorating earnings.

Bookings slid 1.7 percent from November, when they fell 16.2 percent, the sharpest drop since the survey started in 1987, the Cabinet Office said today in Tokyo. Corporate bankruptcies rose 15.8 percent to 1,360 cases in January, the eighth monthly increase, Tokyo Shoko Research Ltd. said in a separate report...

Japan’s current-account surplus narrowed 92 percent in December as exports slumped, the Finance Ministry said today. Overseas shipments fell a record 35 percent, causing the surplus to shrink for a 10th month, the report said...

Manufacturers are likely to delay or halt investment in capacity because of the slump in demand, the Bank of Japan’s chief economist said today. The economy is deteriorating at a pace unseen in the past half century, Kazuo Momma, head of research and statistics at the central bank, said in a speech.

There was one positive piece of data.

... A separate report today showed an index of sentiment among Japanese merchants rose to 17.1 in January from a record low of 15.9 a month earlier.

The latter, though, contrasts with a Friday report that showed that the index of leading economic indicators fell 2.0 points to 79.8 in December.

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