JAPANESE ECONOMY-2008

JAPANESE ECONOMY-2008
Japanese economy is volatile as far as speculations are concerned these days. This situation is very unstable and continuous changing in the background of US economy which is also getting closer and closer to a unprecedented economic recession in the terms of its economic growth and sustainability as US housing market and financial markets are facing financial loss which will directly or indirectly halt the economic growth in US.
There are assumptions following the economic recession in US that Japanese economy will no longer be safe and stable which is proved by the recent years volatile situation in economy. Therefore, the main point worth to be discussed here, how far is the world going to be affected by the weakening of the US dollar to the countries like Japan, China, Korea and other East Asian countries as this weakening of US Dollar is eventually going to boost the export policy as far as forecast for US economic policy is concerned which will halt the trade and business of these export-import oriented countries. The prediction of intensive market reforms and financial reviews and corrections in the US market in the end of this year will probably be more like a good sign for Japanese Economy and its future policies next year.
As we have clearly understood the fact that Japanese Economy is considerably dependant on the US economy which is standing on the thresh hold of a economic recession. The recent data released by the Ministry Of Finance, Japan reveals the fact that the total amount of the public debt over the government of Japan is reaching to the all time high 695 trillion yen (US$6.5 trillion) which directly implies 139.5% of its GDP adds more hardships to previously recessed economy. With this data in the mind no one can overlook the importance of raising oil prices for a prolonged period to the Japanese economy, weakening US dollar which ultimately disturb the economic growth directly which is the main issue of debates these days in Japan. For sure, this being the reason the news of probable hike in consumer tax is often heard in Japan. These are the main point which represents the likely economic recession in japan for next one year.
I f we have a look at the Consumer Price Index as in case of Japanese economy, which again is not showing very optimistic results. In may 2008, Japan Cabinet Office has issued the current data of the Japan Consumer Price Index which reveals that the index has scored the mark of all time low for last 5 years and so to 32.6 down by 13.2 as against to last year. We all know that the Consumer Price Index is essential index as far as the measurement of economic growth or recession is concerned, therefore, Japanese CPI index which consists of five scores and all scores have marked under 50 which is a pessimistic sign for the economy.

* Consumer Confidence Index: 32.6 (-1.3)
* Overall Livelihood: 30.3 (-1.2)
* Income Growth: 36.6 (-0.1)
* Employment: 32.8 (-2.1)
* Willingness to buy durable goods: 30.9 (-1.8)

The index score above 50 clearly reveals some good sign for the economic growth which is very far from the current data. With the background of this statistics Mr. Takehiro Sato, the chief economist of Morgan Stanley Global Economic Forum, has made his prediction of more likely a mild economic recession in terms of net economic growth rate of 1% as against of previously predicted 1.9%. At the same time, creating a shallow contrast, Mr. Sato has not negated of the existing possibility of risk of zero growth rate too in 2008.
There is also one new dimension opened for Japanese government to ponder upon, recently in the money exchange market Japanese yen has gain considerable appreciation as 100 Japanese yen reaches to the dollar, which indirectly promotes many new, beyond traditional sectors, a fresh opportunity for the investors to seek some profit in japan. While it is admitted that Japanese government is still have some trouble with the amount of debt it has from international community in the background of the population getting older, speculations are being made that appreciation of yen will lead to open new doors of investment from other resources also. The global giant companies of energy sector have always found a never lasting interest and faith in Japanese ability to enhance its continuous level of manufacturing products, its futuristic technology and its sustainability.
The recent study conducted by Mckinsey & Co., sovereign wealth funds like those of United Arab Emirates and also some of Asian Economies with considerable amount of foreign capital are the major resources of new capital investment rather than the traditional hedge funds and private investment funds as much of the capital amount is gained by the oil trade and these West Asian country's oil reservoirs are getting depleted so their rulers are seeking some alternatives
resources of wealth in order to sustain their economy, living standard for the future. This move has propelled them to explore some investment opportunities in North East Asian countries like Japan, Korea and China. The recent announcement of Dubai International Capital(DIC) which has invested around US$50 billion in Sony, Japan has proved this inclination of new investors seeking new opportunities in Japan. More investments in this sector particularly from Russia, China and middle East is expected in near future.
Japanese industries and business enterprises, in the past 3 decades from the era of high economic growth, have shown a great deal of success and sheer enthusiasm in the field of robotics, chip designing, semi-conductors trading and bio-technical and bio-chemical sectors of sheer academic study and research. With this pace going on, as the Japanese government is going to maintain its funding, database and other every possible assistance to these institution as a mere hope of the solutions for its economic recession and technical development to meet the global competition in the backdrop of ageing society with a lower birth rate and amounting economic debt, it is quite speculative that global community is certainly going to witness some spectacular achievements in these areas including genetic cells, cancer diagnosis and fuel efficient technology.