Japan Economy Sinks at 15.2% annualized pace!

Don't worry baby - IT'S ALL GOOD!

Japan’s Economy Shrank at Record 15.2% Pace in First Quarter
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By Jason Clenfield

May 20 (Bloomberg) -- Japan’s economy shrank by a record last quarter amid an unprecedented collapse in exports and a drawdown of inventories that could pave the way for a recovery later this year.

Gross domestic product contracted an annualized 15.2 percent in the three months ended March 31, following a revised fourth-quarter drop of 14.4 percent, the Cabinet Office said today in Tokyo. Economists predicted the economy would shrink 16.1 percent.

Japan’s worst recession since World War II probably reached its bottom last quarter, as a pullback in business and consumer spending compounded the export crash that began in October. A rebound in world equity markets has spurred investor sentiment the past month and Prime Minister Taro Aso’s record 15.4 trillion yen ($160 billion) stimulus package has buoyed confidence at home.

“We’ve turned the corner. The economy is no longer in free fall,” said David Cohen, head of Asian economic forecasting at Action Economics in Singapore. “By the end of the first quarter, things had started to firm.”

Reports in the past month suggest the world’s second- largest economy may resume growth this quarter, albeit building from a low point. Confidence among consumers rose to a 10-month high in April. Exports increased in March from a month earlier, and factory production rose for the first time since September, a fact Bank of Japan Governor Masaaki Shirakawa pointed to last week as evidence the economy is “leveling out.”

26-Year Low

Gains in the stock market and earnings projections for the current year add to signs the worst may be over. The Nikkei 225 Stock Average has risen 32 percent from a 26-year low set on March 10. Japanese companies that reported fiscal 2008 results say profits will rise 26 percent in the current business year, according to Tokyo-based Shinko Research Institute Co.

“The worst is over,” said Hiromichi Shirakawa, chief economist at Credit Suisse Group AG in Tokyo. “We’re going to see positive growth -- not significant growth, but growth --from the second quarter onward.”

Stabilizing demand from Japan’s biggest overseas markets, combined with aggressive inventory cuts, has given companies including Honda Motor Corp. room to raise production. Executive Vice President Koichi Kondo said last month the U.S. has probably bottomed. The automaker plans to boost output at domestic factories this quarter as dealerships clear inventories, the Wall Street Journal reported last week.

Export Demand

Still, the failure of export demand to do better than simply stabilize will probably limit the scope of Japan’s recovery. Toyota, Sony Corp., and Panasonic Corp. all forecast continued losses in the current business year. Panasonic said last week it plans to close about 20 factories this year and proceed with the 15,000 job cuts announced in February.

“We’re less pessimistic about the near-term recovery but we remain very cautious about the long term,” said Credit Suisse’s Shirakawa. “Global demand is not likely to revert to its peaks in 2007, 2008. So Japan is going to face a serious problem of over-capacity and over-employment.”

To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net
Last Updated: May 19, 2009 19:51 EDT

http://www.bloomberg.com/apps/news?pid=20601087&sid=aESruA91JsS4&refer=home

 

So there is support at zero?

 

No where to go but up!

 

You should've kept the article away. You want to spark an additional rally?

 

so true!

 

Read between the lines...>VIX below 30, and the US STOCK MARKET 8500 plus on the INDU and the S&P...well you know the S&Ps current level.

All is good, the sun is out, the banks and autos are saved. The Hero OBAMA has come to the rescue.

GET LONG, GET LONG, please all sing along, GET LONG THE BULL MARKET IS HERE TO STAY!!!!!!


Let the Cattle Get Plump, let the sheep wonder in herds....

 

Not to worry about tailspinning into a global downturn the likes of which we haven't seen since '42.

surf said all is well.

 

Japan's economy in record plunge

The world's second biggest economy, which depends heavily on exports, has been hit hard by the global downturn.

The BBC's Roland Buerk in Tokyo says people around the world are buying fewer of the cars and electronic gadgets that Japan is renowned for.

The latest contraction is the biggest since records began in 1955.


Japan's exports have been hit by a collapse in demand


http://news.bbc.co.uk/2/hi/business/8058708.stm