Wednesday, October 14, 2009

Japan: A Leading Tremor?

Weiss Research reports:
"Since the middle of 2007, the yen has climbed:
-20 percent against the Chinese renminbi (or yuan),
-21 percent against the Singapore dollar,
-25 percent against the Thai baht,
-31 percent against the Indonesian rupiah,
-And 43 percent against the South Korean won.
That's a distinct position of weakness for the Japanese because it makes their exports significantly more expensive than their Asian competitors'. Of course, this is horrible news for an economy where exports make up 16 percent of total output! And even with improvements in the global economy, Japan's exports are still down 37 percent from this time a year ago. This is why Japan has experienced the worst contraction of all major economies and is expected to have the weakest recovery. And that's why there is speculation that Japan could return to recession — as soon as the fourth quarter of this year.

Japan led us into the booming 80's and the bust of 2000. Will they provide the next "leading tremor"?

Fortunately, their Finance Minister resembles the "Wise One".

No comments: