Japan braced for worst postwar slump
Japan is headed for its deepest economic slump since World War II.
The world’s third-largest economy shrank 2.2 percent on the year between January and March.
That’s actually better than the 3.4% contraction in a preliminary reading.
But it still confirms that Japan sank has sunk into recession, defined as two straight quarters of contraction.
And that was even before lockdowns were imposed in April, meaning future GDP numbers are certain to be worse.
Recent numbers, including exports, factory output and employment all suggest the country faces its worst postwar slump.
Policymakers are moving to respond.
Monday (June 8) saw parliament begin debating a second supplementary budget.
That’s part of a fresh 1.1 trillion dollar stimulus package that includes injecting capital into struggling firms.
Meanwhile the Bank of Japan will look at further steps in its rate review next week.
But a surprise calm on markets does allow some breathing room.
On Monday, Japanese stocks climbed to a three and a half month high.
That came after last week’s surprise gain in U.S. employment numbers, which fuelled hopes of a swift global recovery.
