[Marxism] Nikkei at 26-Year Low as Asian Stocks Sink

Louis Proyect lnp3 at panix.com
Mon Mar 9 07:49:22 MDT 2009

Nikkei at 26-Year Low as Asian Stocks Sink

By Blaine Harden
Washington Post Foreign Service
Monday, March 9, 2009; 7:51 AM

TOKYO, March 9 -- In the global descent into recession, Japan continues 
to lead the way.

Plunging exports -- down by a record 46.3 percent in January, as sales 
of cars, electronics and machinery all continued to sputter -- pushed 
Japan's current account deficit to a record monthly high, the government 
said Monday.

Overall, the Japanese economy shrank last year by 12.7 percent -- far 
faster than the world's other major industrialized countries. A strong 
yen increased the value of Japanese exports last fall just as demand for 
them was disappearing.

The benchmark Nikkei stock average closed Monday at a 26-year low. 
Bankruptcies were up 10 percent in February, rising for the ninth 
consecutive month. The number of families living on welfare has hit a 
record, and Prime Minister Taro Aso said last week there is "no bottom 
in sight" for the world second-largest economy.

The ongoing contractions in the U.S. and Japanese economies are helping 
to fuel the first global recession since World War II, the World Bank 
said yesterday.

The current account is the broadest measure of Japan's global trade and 
it has traditionally been a robust number that quantified the country's 
extraordinary ability to make itself rich by selling high-quality goods 
to the United States, Europe and China. But in January the deficit in 
the current account reached a record $1.8 billion -- a figure that is 
seven times larger than any monthly trade deficit since comparable 
records began to be kept in 1985.

Analysts said there is little chance that Japan's trade balance or its 
fast-shrinking economy can recover until the United States pulls out of 
its economic tailspin and consumers resume buying Japanese cars and 
other exports. Growth in Japan depends exclusively on growth in exports, 
with the U.S. market the major driver in car sales. Exports to the 
United States dropped 52.9 percent in January compared to a year 
earlier. They were down 47.4 percent to Europe and 46.7 percent to Asia.

Compared to their counterparts in the United States, Europe and China, 
politicians in Japan have been slow and relatively unimaginative in 
coming up with policy measures that might stimulate the economy.

After nearly four months of arguing, the government last week passed a 
stimulus package that will give each person in Japan about $130. But the 
public, according to opinion polls, does not approve of the cash handout 
and does not think it will help revive the economy.

The government led by Aso is deeply unpopular and the public is 
demanding that he call an election soon. An election must be held by 
September. Polls now show that Aso and his ruling Liberal Democratic 
Party are likely to be tossed of power.

Meanwhile, consumer spending -- never all that robust in this aging 
country -- has declined steeply. The Bank of Japan has begun buying some 
stocks and bonds from companies in order to prop up the stock market and 
ease a credit squeeze.

The number of households on welfare reached a record 1.2 million in 
January, according to a survey published Monday in the Asahi newspaper. 
It said applications for public assistance were up 30 percent in January 
over December.

Increases in the number of people requesting welfare were greatest in 
regions of Japan where large numbers of people work in car and 
electronics factories. Many of those who have lost their jobs were 
classified as "non-regular" employees, a term that is applied to 
immigrants and part-time workers.

Most of these worker do not qualify under Japanese law for unemployment 
insurance, so they often apply for welfare assistance.

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