JAPAN’S ANNUAL MONEY SUPPLY GROWTH RATE

834 Words4 Pages
JAPAN’S ANNUAL MONEY SUPPLY GROWTH RATE In November, Japan’s industrial production increased output of cars for foreign customers. However, the nation’s retail sales continued to fall. The output of Japan’s factories and mines gained significantly. The output will reinforce expectations that recover in overseas demand. The various efforts could help prevent Japan’s economy from going back into recession of growth. The works of the U.S. and China will continue the upward trend in output thanks to the demands. Manufacturers are expecting their output to rise 3.4 % in December. However, other data shows that Japan’s domestic demand remains weak. This will keep the nation’s recovery vulnerable to slowdown in overseas growth. Japan had fifteen straight months of decline from the trade ministry, but automobile sales continued to jump. Japan’s industrial output is their main growth to drive their economy. The demand side of the economy will deteriorate, because of falling salaries and bonuses. This means that Japan’s economy will lose power if overseas economies take a turn for the worse. In April of 1990, Japan’s unemployment rate fell. The job rate fell 4.5 percent to 4.4 percent and this was Japan’s lowest level. The employment prospects were finally encouraging consumers to spend after years of having a tight grip on their cash. The 1990 has, reflects on broader recovery than any of the upturns lived. The early turnarounds did not include the economy’s finance and retail mostly exports. The banks have gotten rid of the bad loans that lingered around their profits. The recoveries did not bring the unemployment rate down because they were too short term and not broad enough. Japan’s unemployment rate has be... ... middle of paper ... ... Banks of Japan began to tighten up and yen started appreciating. In 1981, the U.S. tight monetary policy combined with large federal budget deficits let to high real interest rates and rising dollar. Central banks begin selling Dollar and fell when major economies agreed that U.S. dollars had appreciated too much. Japan began buying dollars and increased rate of money growth. This made interest rates fall very low. Japan failed to prevent disinflation from becoming deflation. The Bank of Japan focused on decreasing nominal interest rates but failed to recognize that the decline in prices had increased the real rate of interest. An economy in recession can be returned to full employment by either stimulating aggregate demand through monetary policy, fiscal policy or allowing the price level to fall so that value of money rises to the cost of products.

More about JAPAN’S ANNUAL MONEY SUPPLY GROWTH RATE

Open Document