Virgil
02-15-2009, 07:09 PM
http://www.bloomberg.com/apps/news?pid=20601087&sid=al6PtfluFv0c&refer=home
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Feb. 16 (Bloomberg) -- Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, amid an unprecedented collapse in exports and production.
Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.
Exports plunged a record 13.9 percent from the third quarter as global demand for Corolla cars and Bravia televisions evaporated. Toyota Motor Corp., Sony Corp. and Hitachi Ltd. -- all of which are forecasting losses -- are firing thousands of workers, heightening the risk a slump in household spending will prolong the recession.
“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”
The Nikkei 225 Stock Average fell 0.7 percent as of 9:35 a.m. in Tokyo. The yield on 10-year government bonds rose 2 basis points to 1.28 percent.
The world’s second-largest economy shrank 3.3 percent from the third quarter, today’s report showed. That compared with the U.S.’s 1 percent contraction and the euro-zone’s 1.5 percent decline. Economists predicted a 3.1 percent drop.
Without adjusting for inflation, Japan shrank 1.7 percent from the previous quarter, less than the 2.1 percent analysts estimated. The GDP deflator, a broad measure of price changes, rose 0.9 percent, the first increase in a decade.
Triggered by Lehman
Japan has been in a recession since November 2007, according to a government panel that dates the economic cycle. Last quarter was defined by the fallout from the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc., which set off a credit crisis that erased more than $14 trillion from global equity markets and paralyzed world trade. The meltdown also spurred a 14 percent surge in the yen against the dollar that’s eroded earnings for exporters already struggling with record declines in overseas sales.
The yen traded at 91.61 per dollar compared with 91.76 before the report was published.
Net exports -- the difference between exports and imports -- accounted for 3 percentage points of the quarterly drop in GDP.
Japan has become more dependent on exports for its growth over the past decade. Overseas shipments make up 16 percent of the economy today compared with about 10 percent in 1999.
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Feb. 16 (Bloomberg) -- Japan’s economy shrank at an annual 12.7 percent pace last quarter, the most since the 1974 oil shock, amid an unprecedented collapse in exports and production.
Gross domestic product fell for a third straight quarter in the three months ended Dec. 31, the Cabinet Office said today in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6 percent contraction.
Exports plunged a record 13.9 percent from the third quarter as global demand for Corolla cars and Bravia televisions evaporated. Toyota Motor Corp., Sony Corp. and Hitachi Ltd. -- all of which are forecasting losses -- are firing thousands of workers, heightening the risk a slump in household spending will prolong the recession.
“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”
The Nikkei 225 Stock Average fell 0.7 percent as of 9:35 a.m. in Tokyo. The yield on 10-year government bonds rose 2 basis points to 1.28 percent.
The world’s second-largest economy shrank 3.3 percent from the third quarter, today’s report showed. That compared with the U.S.’s 1 percent contraction and the euro-zone’s 1.5 percent decline. Economists predicted a 3.1 percent drop.
Without adjusting for inflation, Japan shrank 1.7 percent from the previous quarter, less than the 2.1 percent analysts estimated. The GDP deflator, a broad measure of price changes, rose 0.9 percent, the first increase in a decade.
Triggered by Lehman
Japan has been in a recession since November 2007, according to a government panel that dates the economic cycle. Last quarter was defined by the fallout from the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc., which set off a credit crisis that erased more than $14 trillion from global equity markets and paralyzed world trade. The meltdown also spurred a 14 percent surge in the yen against the dollar that’s eroded earnings for exporters already struggling with record declines in overseas sales.
The yen traded at 91.61 per dollar compared with 91.76 before the report was published.
Net exports -- the difference between exports and imports -- accounted for 3 percentage points of the quarterly drop in GDP.
Japan has become more dependent on exports for its growth over the past decade. Overseas shipments make up 16 percent of the economy today compared with about 10 percent in 1999.
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