By: Mike Campbell
Japan recently joined the post recession club with the likes of France, Germany and New Zealand. Yet, figures just released for Japanese exports in August showed that they were down by 36% on the previous year’s level. Indeed, August marked the eleventh consecutive month when Japan’s exports to the rest of the world had dropped; a fact ascribed to dwindling world demand. Japanese steel and car exports were down by 43 and 50% respectively year-on-year. Despite this, Japan has also posted data indicating that the country’s trade balance (export value minus import value) has been positive for the seventh straight month. Japan has turned a negative trade balance from last year into a healthy (but meagre) trade surplus for this year of some $2bn. The depth of the recession in Japan has been the worst amongst industrialised nations, leading to record levels of unemployment. Against this backdrop, the nation’s imports from the rest of the world have also cut back sharply, down 41% from the previous year which helps the trade balance equation
The Yen has reclaimed some of the ground that it has lost against the Euro this week (rising by 1.2%), but it has been trending lower against the single European currency all month.
Data for (existing) home sales in the USA showed a decline by 2.7% in July, reversing the trend of the previous four months. Analysts say that this reflects the fragility of the housing recovery. The partial recovery in the US housing market has largely been down to the government stimulus measures. Of course, sub-prime lending for home purchases was a precipitating factor of the global recession. The cost of buying a home was down by 12.5% over last year’s price.