JAPANESE ECONOMY

Japanese Economy and Export to the United States



Abstract

In this study we try to explore the concept of “Japanese Economy” in a holistic context. The main focus of the research is on “Japanese Economy and Export to the United States” and its relation with “Export to the United States”. The research also analyzes many aspects of “Japanese Economy” and tries to gauge its effect on their exports to United States. Finally the research describes various factors which are responsible for “Japanese Economy” and tries to describe the overall effect of Japanese Economy on Export to the United States.

Table of Contents

Introduction4

Japanese Economy after Earthquake4

Rebuilding Begins6

Economic Performance9

Inflation in Japan9

Economic Crisis in Japan10

Fiscal Policy13

Monetary Policy13

External Sector14

Foreign Trade Policy14

Economic Growth15

Japanese Export to the United States18

Conclusion18

References20

Japanese Economy and Export to the United States

Introduction

The economy of Japan is the third largest in the world after the United States and the People's Republic of China, and ahead of Germany at 4th. According to the International Monetary Fund, the country's per capita GDP was at $33,805 or the 24th highest in 2010. For three decades from 1960, Japan experienced rapid economic growth, which was referred to as the Japanese post-war economic miracle.

Japanese Economy after Earthquake

The picture of the economy that is beginning to emerge from recent data broadly confirms the Economist Intelligence Unit's expectations of a typical post-disaster trajectory, in which a sharp reduction in industrial output and general economic activity are followed by a reconstruction driven return to growth. It should be noted in this context that the economy was already weak before the disaster struck. In real terms, GDP fell by 0.7% on a quarter-on-quarter basis in October-December 2010. The economy then contracted by a further 0.9%—equivalent to 3.5% in annualized terms—in the first three months of 2011. The disaster played a role in this deterioration, although it affected only the last few weeks of the first quarter; as such, a contraction would almost certainly have occurred even in the absence of the natural disaster (Zhang, 2007).

A further decline in GDP is widely expected to the April-June quarter, given the ongoing interruptions of supply chains and the disruption to the energy grid. Indeed it is in GDP data for the second quarter of 2011 that the negative effects of the disaster are likely to be most visible. Our latest forecast of quarterly GDP for Japan envisages a further, much larger contraction of 1.7% quarter on quarter in April-June. The government is not due to release its preliminary first estimate of GDP for the second quarter until August 15th.

A variety of other data show how the economy has struggled in the past four months. The Tohoku region in the north-east of the country, which bore the brunt of the damage, accounts for only a small part of the Japanese economy, but in the aftermath of the earthquake it became apparent how deeply integrated the region is in terms of national and global supply chains. The closure of parts-manufacturing plants and damage to the power grid consequently had ...