Bank of Japan announces further doom and gloom

In a quarterly report released today in Tokyo, the central bank of Japan has announced that they have cut the country’s economic assessment across nine regions, due to both a fall in exports as well as a reduction in domestic spending, resulting in a slowdown in economic growth,

This is the first time the bank has reduced or changed its view since the report began back in 2005 although many analysts believe that the country had entered a recession before the severity of the credit crunch really hit.

For the second quarter in a row, the economy has shrunk and most notably it is the reduction in factory output as well as reduced consumer spending that have cause the Bank of Japan to backtrack on their forecast.

The hardest hit area is corporate earnings as companies are cutting their capital investment which has partly led to the worst contraction of the economy in seven years.

The outlook is likely to remain bleak due to the fact that job losses are increasing and business confidence is also at an all-time low.

The motor industry is the heartbeat of Japan, as well as being a real source of national pride, although the economic fallout has meant a reduction in new car sales, and orders from China have slumped especially.

Japan’s currency gained 9 percent against the dollar and is 18 percent up against the euro so the export market has been hit.

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