Japan economic prognosis: negative

Edward Hugh describes the situation in detail at Double Dip Alert In Japan.  The key points are:

False Dawns:

“This was the second consecutive quarter of expansion, following four successive quarters of contraction, and the apparent pace was a marked acceleration over the 2.7% annualized pace of the April to June period. But even before the champagne bottles were uncorked nagging doubts started to appear, in the shape of the domestic demand deflator – a measure of the changes in the price of goods and services – plunged by 2.6%, the fastest pace of price decline recorded since as far back as 1958. This was the third straight quarter of falling prices in Japan, and since there is no real likelihood that this situation is going to be reversed soon the government has now officially recognised that Japan is back in deflation.”

Industrial Output Slows

Services Wallow In The Mire

Housing Starts In Freefall

Export Growth Not Sufficiently Strong

Reduced Trend Growth

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