Last time I had Japan under the loop I asked whether there was no end in sight for Japan's economy and as I wind up for another close look, I must say that it is still very difficult to find good news if any at all. However, and for the sake of argument I thought that we might begin with some recent arguments in the context of the global economy which suggest that we may be past the worst of our travails. The first observation comes from the Economist's ever eloquent financial markets pundit, Buttonwood, who recently made the neat point that while we are still stuck in the mire, the second derivative might be turning positive. This suggests that while indicators are still on the decline they are now declining less rapidly. In Tokyo, Cassandra voices a similar sentiment

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By Claus Vistesen: Lausanne It has been a while since I last had Japan under the spotlight where and where I noted that Japan almost certainly would be tumbling into or very close to recession. Since then, data have been pointing only one way really and with the recent downward revision of an already quite awful Q2 GDP reading Japan now seems certain to be flirting with a recession. As per usual, I will peruse the most recent pile of data but now that Japan stands on the brink of yet another recession in the 21st century, I also think that it also finds itself confronted with a crucial question. What will happen to spending and the political situation in the wake of Fukuda’s resignation? I am no political specialists, but I will try to highlight the issue from an economic view point all the same. All the Features of a Recession As if ...

It has been a while since I last had Japan under the spotlight where and where I noted that Japan almost certainly would be tumbling into or very close to recession. Since then, data have been pointing only one way really and with the recent downward revision of an already quite awful Q2 GDP reading Japan now seems certain to be flirting with a recession. As per usual, I will peruse the most recent pile of data but now that Japan stands on the brink of yet another recession in the 21st century, I also think that it also finds itself confronted with a crucial question. What will happen to spending and the political situation in the wake of Fukuda’s resignation? I am no political specialists, but I will try to highlight the issue from an economic view point all the same. All the Features of ...

[Update: Japan contracts 2.4% in Q2,]By Claus Vistesen CopenhagenIn my last note on Japan asked how much longer Japan could continue to fight off the incoming recession faced with a continuing shaky outlook on exports as well as a domestic economy steadily slowing down. Well, it seems as if the answer to this question can now be provided. With the recent news that industrial production continues its slowdown as well as the news that exports actually fell in June I am thus confident to stick with my call that Japan will enter a recession at some point in 2008-09. The exact timing will be suggested below.

In fact, a recession seems to be almost a foregone conclusion at this point since if we look at the recent messages emanating from official Japanese authorities, they are indeed bracing themselves for something ugly. Perhaps someone from

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In my last note on Japan I asked how much longer Japan could continue to fight off the incoming recession faced with a continuing shaky outlook on exports as well as a domestic economy steadily slowing down. Well, it seems as if the answer to this question can now be provided. With the recent news that industrial production continues its slowdown as well as the news that exports actually fell in June I am thus confident to stick with my call that Japan will enter a recession at some point in 2008-09. The exact timing will be suggested below. In fact, a recession seems to be almost a foregone conclusion at this point since if we look at the recent messages emanating from official Japanese authorities, they are indeed bracing themselves for something ugly. Perhaps someone from the statistics department sent a primer of the Q2 GDP figures (due 13.08.2008) ...

By Claus Vistesen Copenhagen

Japan is still hanging on it seems, but for how long? This is what I will try to clarify in this entry. In the following I will thus continue my ongoing analysis on two months' worth of data as well as loads of timely analysis from other sources where, as usual, Ken Worsley and Takehiro Sato/Feldman from Morgan Stanley have my complete attention. In accordance with tradition four overall themes will form the backbone of the analysis; trends in prices, domestic demand figures, industrial output/exports, and finally the JPY which as ever is the subject of much attention in currency markets and beyond.

When it comes to prices it could seem as if Japan's quick return to inflation in the core-of-core index was nothing more than a blip. As can consequently be observed from the graph below Japan is once again stuck in

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