Asia Today: Japan Slips into Recession
Japan's economy contracted much more than expected in the January-March quarter, its second consecutive quarter of decline, putting it technically in a recession. Does the country have the political and economic will to fight its way out? WSJ's Mariko Sanchanta and Jake Schlesinger discuss

Cost of Japan Quake May Top $200 Bln
Mar 16 - Japan's devastating earthquake and deepening nuclear crisis could result in losses of up to $200 billion for the world's third largest economy, but the global impact remains hard to gauge. Ciara Sutton reports

REUTERS: Analysis: Japan heading back into recession – Japan's economy seems to be in a state of almost suspended animation as its nuclear crisis shows no sign of ending, sorely testing analysts' hopes for a swift rebound led by reconstruction efforts. » | Wayne Cole | SYDNEY | Thursday, March 17, 2011

China Thwarts Japan's Economy, Stands No 2 In 2010

By ETHAN Markoff

JAPAN NEWS - China has replaced Japan in 2010 and becomes the second largest economy after the United States. It is a shock to Japanese economic foundation, which had its position for much of the last four decades, and almost surpassed even the United States for its exponential growth curve in 80s. Japan's economy had experienced its decline in the fourth quarter when compared with the previous three months, falling 0.3 percent in the October-December quarters as the end of the government incentives on environmentally friendly cars gave a negative impact on people's spending habit. At a result, Japan's economy shrank 1.1 percent annually from the previous quarter.

The contraction in the Japanese economy has led the country to suffer in front of rival China whose economy has risen to $5.88 as compared to Japan’s economy for 2010 to $5.47 trillion. This figure also testifies that China has tremendously raised economically in the recent years and holds a position as an economic superpower. Just five years back, China's was far more lagged behind Japan with gross domestic product was around $2.3 trillion, about half Japan's.

China is in the peak of its urbanization and industrialization, whereas Japan's economy is quite old now. Despite rapid economic growth, China's per-capita income is about $3,600, less than Japan. Initially Japan's economy had benefited from China's growth as trading shifted production and took advantage of lower costs, and small businesses gained profit, holding increasing attractive market for Japanese goods.

However, Japan's economy had contracted in the fourth quarter, it expanded 3.9 percent over all in 2010 compared with a year earlier.

Japanese government expressed its concern and showed optimism about its economic assessment and said the economy could soon rebound, as exports and factory output are gained by the steep demand China and other growing economies in Asia.

In the October-December quarter, the spending of people rapidly fell down to 0.7 percent for generous government benefits for fuel efficient cars. The recent high tax levied on tobacco also affect cigarette sales. Net exports were hurt by a surge in the yen to 15-year highs, which affected Japanese exports. Other factors include such as capital investment rose 0.9 percent that fell short of the 1.5 percent from the previous quarter.

However, the country's GDP did not affect the stock market and it rose to 0.8 percent at midday Monday.

Japan GDP Figures Show An Alarming Slow Down

By MALILA Harris

JAPAN - An official statistics has shown that Japan GDP stature sharply slowed down. The economic growth in the country is continuously declining since early this year.

The gross domestic product rose by 0.1% between April and June, which is far lower than expected. Analysts predict the export led recovery is not up to the mark and moreover the yen hits a high against the dollar.

On the other hand the two competitor countries Germany and US shows significant economic growth. Germany and U.S have witnessed a significant growth of 2.2% and 2.4% respectively.

It is reported that Japan is among the wealthiest and flourishing countries in the world but recent parabolic curve of growth has made a concern for the government. In a report of World Bank shows the country in the first eight years expanded by only 5% while China rocketed by 261%.

The shares of the country also closed lower than expected, with Nekkei 225 fell lower than benchmark, seeing a negative of 0.6% to 9,196.67.

Dr Seijiro Takeshita, director of Mizuho International, indicted the wrong policy choice of Japanese government caused the slower down of economy.

"The problem for Japan was they were going for short-termism as far as policy was concerned. They were trying to put a bandage over a deep wound," he said.

"Private consumption didn't take off because our economy is still so dependent on external demand or exports.

In recent months yen has been rising against dollar and economic growth largely depends on export. The rising yen makes the country less competitive worldwide.

Economic Minsiter Satoshi Arai said the government had to coordinate with the Bank of Japan to take action against rising yen.