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Japan’s Economy Suffering From World Financial Crisis

Associated Press reported that Japan, one of the few countries with the most stable economy, is suffering from economic difficulties at present. Thanks to the world financial crisis.

TOKYO – Japan’s contracting economy got more bad news Friday when figures showed that industrial production plunged by its biggest margin ever in November, the jobless rate jumped and household spending fell.

Output at the nation’s vital manufacturers fell 8.1 percent from October, the largest drop since Tokyo began measuring such data in 1953, as Japan’s automakers and others slashed output to cope with slowing global demand. The decline was worse than analysts’ forecasts, and a survey predicted a similar 8 percent decline in December.

“Exports and industrial production are falling so extraordinarily quickly that it almost defies analysis,” said Richard Jerram, chief economist at Macquarie Securities in Tokyo.

The monthly drop in factory production is nearly double the previous record fall of 4.3 percent in January 2001, according to the Ministry of Economy, Trade and Industry. Earlier this week, trade data showed that Japanese exports plunged a record 26.7 percent in November.

Many companies, including big names like Toyota Motor Corp. and Sony Corp., have announced plans to cut production and workers. The yen’s recent strength against the dollar and euro has also dealt a huge blow to this export-oriented economy — the world’s second-largest — by eroding overseas earnings.

The job cuts are already being reflected in a higher unemployment rate, which rose to 3.9 percent in November from 3.7 percent in October, the Ministry of Health, Labor and Welfare said. The figure does not include those who have given up looking for work and exited the labor market entirely.

The ministry said 2.56 million people were unemployed in Japan in November, an increase of 100,000 from a year earlier.

Here in the Philippines, the economic situation is worse. I will udpate this site with more local business news in the Philippines in the near future.

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