[ad_1]
Japan fell into recession and became the fourth largest economy after the United States, China, and Germany.
advertisementJapan’s economy shrank in the final quarter of 2023, falling behind Germany, but is now the world’s fourth largest economy.
The government reported that the economy shrank at an annual rate of 0.4% from October to December, but grew 1.9% for all of 2023, according to real GDP data from the Cabinet Office.
It contracted by 2.9% in the July-September period. Two consecutive quarters of economic contraction are considered an indicator that the economy is in a technical recession.
Japan’s economy was in second place until 2010, but it was then overtaken by China. Japan’s nominal GDP last year was $4.2 trillion, while Germany’s was $4.4 trillion or $4.5 trillion, depending on currency conversion.
What is behind Japan’s economic decline?
Since the comparison of nominal GDP is based on dollars, the weaker yen was the main reason for the decline to fourth place.
On Tuesday night, Japanese officials sought to defend the yen. But so far the harsh warnings have proven ineffective.
“Japan’s top currency diplomat, Masato Kanda, expressed displeasure about the sharp movements in the yen, saying it could have a negative impact on the economy. Kanda said that as a potential solution to the problem, He even hinted at introducing currency intervention,” said Richard Snow. said a market strategist at Daily FX.
“Japanese authorities previously intervened in the foreign exchange market in September and October 2022, selling dollars and buying yen to increase the value of the local currency. Nearly $20 billion was spent in an effort to strengthen the yen. This was the first dollar-yen intervention in 24 years, and if the Japanese government tires of repeated warnings, it could intervene again soon. Yes,” the analyst added.
On the other hand, Japan’s Finance Minister Shunichi Suzuki reiterated the importance of stable currency movements and reflecting fundamentals, and is closely monitoring exchange rate (currency) movements with a strong sense of crisis. said.
Japan’s relative weakness also reflects a declining population and lagging productivity and competitiveness, economists say.
[ad_2]
Source link
