Japan Cuts Assessment, Says Conditions Are Worsening
The Japanese government lowered its assessment of the economy for a third month, describing conditions as the most severe since 2002.
“The economy is worsening” the Cabinet Office said in a monthly report in Tokyo today, the first time it used the language in more than six years. It last month said the economy “has weakened further.”
Exports plunged the most on record in November and companies are firing workers and cutting output, deepening a recession in the world’s second-largest economy. Bank of Japan Governor Masaaki Shirakawa said last week he has never experienced such severe conditions after the bank cut its key interest rate to 0.1 percent.
“It’s hard to imagine the economy turning around now,” Economic and Fiscal Policy Minister Kaoru Yosano told reporters in Tokyo today. “We need to be concerned about downside risk.”
The last time the government became more pessimistic about the economy for three straight months was in January 2003. Japan has downgraded its assessment seven times this year, the most since 2001 health insurance quote.
Sentiment among Japan’s largest manufacturers fell the most in 34 years, a central bank report last week showed, indicating Japan’s first downturn in seven years is deepening. Toyota Motor Corp. and Sony Corp. have in the past month announced plans to fire thousands of workers.
“There is fear that the employment situation is worsening further due to the rapid reduction of production,” the report said.
Second Stimulus
The number of jobs available to a job seeker dropped to the lowest since May 2004 and consumer sentiment is at a record low. Prime Minister Taro Aso announced his second stimulus package since September this month.
The government downgraded six categories of the economy including industrial production and employment, today’s report showed.
Filed under: marketing by Finance Boss