Japan’s Third Lost Decade Begins
Japan’s recession is not paving the way for sustained growth. It is prolonging new debt and liquidity and thus deteriorating fiscal discipline. In the last quarter, Japan’s economy fell into recession. In the West, it was characterized as “unexpected.” The realities are precisely the reverse. With its third ’lost decade,’ Japan has entered an era ... Read more
More Bad News for Fukushima and Tepco
By Andy Tully: Tokyo Electric Power Co. (Tepco) now says the meltdown of the Fukushima No. 1 nuclear power plant in March 2011 involved all the fuel rods in the affected reactor, causing them to fall to the bottom of the containment vessel. Eight months after the massive tsunami caused the accident, Tepco said the ... Read more
Eurocrisis Round Two, Blame the Germans Edition
“What strikes me, also, is the extent of intellectual confusion that remains.” – Paul Krugman, Europanic 2.0 “The problem is that Germany has continued to maintain highly competitive labor costs and run huge surpluses since the bubble burst — and that in a depressed world economy, this makes Germany a significant part of the problem.” ... Read more
Is Japan Back In Recession?
“People should seriously consider that Japan’s economy may have fallen into recession despite the weaker yen and a stock rally from the BOJ’s easing and the flexible fiscal policy by Abe’s administration,” said Maiko Noguchi, senior economist at Daiwa Securities. “Initial expectations that the economy could withstand the negative effects of a sales tax hike ... Read more
Does Abenomics Work? – The Doubts Grow
Is something in the air? Do I detect a change in consensus on the way things are going in Japan? Certainly a slew of articles have been published in the financial press over the last month questioning where the Abenomics experiment is headed for. The general conclusion seems to be that wherever it is it ... Read more
Abenomics – What Could Possibly Go Wrong?
If this week’s economics news is positive then that is good. But if it’s bad then that’s even better, since there is more potential for it to improve next week, and if it doesn’t, well that’s doubly better since there will be even more reason for central banks to step in and push up asset ... Read more
Japan Inflation At A 32 Year High?
Just in case anyone was in any doubt last weeks newspaper headlines blared it out for us loud and clear – Japanese inflation is back, and has even hit levels last seen in 1982. (Click on image below for better viewing). In fact consumer prices in Japan rose at an annual rate of 3.4% in ... Read more
Will Japan Re-enter Deflation in April 2015?
Reading the most recent statements from Bank of Japan Governor Haruhiko Kuroda or Finance Minister Taro Aso you would get the impression that the days of deflation are now well and truly numbered in Japan. Martin Schulz, economist at Fujitsu Research Institute in Tokyo, goes even further. “Deflation is over in Japan,” he told Bloomberg ... Read more
A Simple Chart Illustrating Why Japan Style Deflation Is Now More Or Less Inevitable In Spain
Here’s one simple chart which illustrates why I think Japan style deflation is now more or less inevitable in Spain. Curiously it comes from the Ministry of Employment and illustrates the relation between the movement in average wages caused by actual movements in the real wage and those caused by what is known as the ... Read more
Why Abenomics May Not Work
Abenomics, Tokyo’s winning the right to stage the 2020 Olympics, modest improvements in the economy and a consumption tax increase intended to signal resolve in dealing with its high government debt levels have given Japan new hope. The Prime Minister has stated that “Japan is back!” But the reality is somewhat different. Activity is easily ... Read more