The depth of the downturn in Japan, the world’s second-largest economy, emerged yesterday with industrial production showing a record 9.6 per cent decline last month and unemployment up by 0.5 per cent to a three-year high of 4.4 per cent.
Output fell at its fastest pace since records began in 1953 and it was considerably worse than the 9 per cent consensus forecasts expected by the market and up from a previous record of 8.5 per cent a month earlier. It is particularly worrying for a country that relies heavily on global exports of cars, electronics and machinery.
Needless to say, this is a lot worse then what America is experiencing even if you account for the build up in inventories. An almost 10% drop in one quarter is a 40% annualized drop. I don’t really think it will keep dropping at the current rate, but even if all it did was level out that would still be a heck of drop.