Saudi Arabia and Indonesia call for immediate end to Gaza catastrophe Private sector companies sign pacts worth $27 billion during visit of President Prabowo    Prince Faisal and Marco Rubio discuss over phone regional situation    Saudi Arabia and Indonesia agree to bolster bilateral ties Crown Prince and President Subianto chair first meeting of Saudi-Indonesian Supreme Coordination Council    Number of Sakani platform users exceeds 4.6 million by first half of 2025    International visitors spend nearly SR50 billion in Saudi Arabia during 1Q 2025    Saudi Arabia condemns calls for imposing Israeli sovereignty over occupied West Bank    Lacazette joins NEOM SC as Saudi Pro League newcomers boost attack with French star    Al Hilal sign Abderrazak Hamdallah on loan for Club World Cup push    Trump says Israel has agreed on terms for 60-day ceasefire in Gaza    New evidence suggests Russian forces shot down Azerbaijan Airlines Flight 8243    Iran's president halts cooperation with UN nuclear watchdog, reports say    Commerce Ministry recalls over 88,000 Anker portable chargers over fire risk    Elm, One sign MoU to enhance strategic partnership and support local content in communications and marketing sector    BTS are back: K-pop band confirm new album and tour    Saudi FM receives message from Iranian counterpart    Inzaghi hails 'historic' Al Hilal win over Man City: We climbed a mountain with no oxygen    Michelin Guide launches in Saudi Arabia with phased rollout in 2025    Al Hilal stun Manchester City in seven-goal thriller to reach Club World Cup quarterfinals    'How fragile we are': Roskilde Festival tragedy remembered 25 years on    Historic Jeddah's visual identity re-imagined through global art installations at Al-Arbaeen Lagoon    Sholay: Bollywood epic roars back to big screen after 50 years with new ending    Ministry launches online booking for slaughterhouses on eve of Eid Al-Adha    Shah Rukh Khan makes Met Gala debut in Sabyasachi    Pakistani star's Bollywood return excites fans and riles far right    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Japan heading toward recession: Study
Published in The Saudi Gazette on 03 - 12 - 2012

KUWAIT — Japan posted its fourth consecutive monthly trade deficit, stoking fears that it is headed for a recession, the Kuwait China Investment Company (KCIC) said Sunday in a report.
Export numbers improved slightly, although they still remain in contraction. Exports declined by 6.5 percent year-on-year (YoY) in October from 10.3 percent in the previous month. Exports fell in 18 out of the last 21 months, due to the slowing global demand (exports to the EU contracted for 13 consecutive months), and the appreciation of the yen, which gained 7.3 percent between March and September due to its role as a safe-haven asset.
In addition, territorial tensions between China and Japan resulted in boycotts that hurt Japan's exports. In spite of the recent softening of the currency, which depreciated, almost 3 percent in November, exports kept contracting. Imports also fell by 1.6 percent YoY, driven by the weakening domestic sector, as highlighted by the lower growth in retail sales (0.4 percent YoY in September). However, upward pressure on import growth is likely to come from Japan's strong dependence on energy imports following the shutdown of 54 nuclear reactors after last year's Fukushima disaster.
The trade balance is the difference in value between a country's total exports and imports. When a country is in a trade deficit, then it is a net importer: its imports are outweighing its exports in value. Over 10 years up to 2010, half of Japan's real GDP growth was accounted for by net exports.
The trade balance itself is a component of the current account balance. The current account balance records the purchase and sale of goods and services and is comprised of the trade balance, net income from abroad (repatriated profits, dividends, interest payments) and net current transfers (remittances, pensions, grants, international aid).
Japan has been running a current account surplus for decades. However, if the trade deficit persists, then the fate of the current account surplus will depend on foreign income from abroad. Japan's trade balance is also relevant as a leading indicator of the global economy.
Case in point, Goldman Sachs highlighted a 90 percent correlation between its Global Leading Indicator (GLI) and Japan's trade balance, with a three month lead. In other words, a deteriorating trade balance in Japan could be indicative of a further decline in global momentum in the medium term.
Weak trade figures have pulled third-quarter GDP figures into contraction at -3.5 percent (annualized) from 0.7 percent (annualized) in the second quarter. As a result, Japan is teetering on the edge of a recession.
Japan's trade balance is expected to remain in deficit until the end of 2012, especially as export growth will be weak and energy imports rigid.
On Nov. 21, the yen hit a seven-month low against the dollar on growing expectations that the Bank of Japan will take more aggressive policy action under the new government next month, giving the economy a much needed boost.
Just three weeks before elections, Shinzo Abe, most likely to be the next prime minister of Japan and the current leader of the main opposition, the Liberal Democratic Party (LDP), has promised to push for the central bank to undergo more drastic measures. In order to lift the economy out of deflation, he is calling for a 2 percent inflation target, up from the current 1 percent.
Meanwhile, the Bank of Japan (BOJ) opted to hold fire until the elections.
“We expect a more aggressive expansion of its monetary policy soon.” the report said. — SG


Clic here to read the story from its source.