Japan's economy to contract at faster pace

One of the strongest country in Asia, Japan is contracting at a faster pace due to the global financial crisis. The main reasons for the fast contraction in the economy is due to the decrease in exports and production. According to this artcle, Japan's industrial output fell by 3.1% in Octber which a record of 8.6 % fall in the fourth quater. AS for the GDP, it has been creased by 0.9%. It is expected that the recesion in Japan would likely to continue till 2009, and a slow recovery would be initiated.

During this semester for another class, I have reserached the effect of the global financial crisis in the Asian countries. Very similar to this article, I found that there has been increasing amount of corporate bankrupcies due to the financial crisis. The main reasons were the decrease in overseas demand in Japnese goods which significatly decreased the export of the country, tight domestic financial conditions which limited the availability of credit for the finacial instiutions resuling in decrease in the growth. As projected on this article, the GDP for all countries around the world including Japan would decrease and a slow steady growth would be intiated at the end of 2009.

There are policies implemented to recover from the financial crisis, but as all countries are facing dried up liquidity in the money market, all countries including Japn are currently facing difficulties in recoving from the crisis rapidly and effectively