Japan's economy under pressure

Published on: 17-Aug-2020
Category: Trading
Last updated: 17-Aug-2020

Japan's economy under pressure

The consequences of the corona pandemic are making themselves felt in Japan. Economic output is not shrinking as it has been for a long time and is thus also depressing the stock markets. The gross domestic product of Japan fell by 7.8 percent compared to the previous year. The virus is thus showing its effects on the real economy. Consumers held back and exports also fell, as other countries had already been hit harder economically by the crisis. The export of goods and services fell by 18.5 percent compared to the quarter of the previous year.

The Japanese economy was in dire straits even before the current crisis. In October last year, the government raised the value added tax from eight to ten percent, thereby causing GDP to shrink slightly. Compared to the past and the last major crisis in 2008/2009, the extent of the current economic development can now be seen. The Japanese economy is suffering almost twice as much from the current situation. In 40 years, economic output has not fallen as sharply in one quarter as in the last.

The latest economic data is also reflected on the stock exchanges. Investors are unhappy and are making the week off to a bad start for the country's major indices. At the end of the trading day in Tokyo, the leading Nikkei index lost 0.7 percent and is currently trading slightly above 23,100 points. The broader Topix index has so far suffered a loss of 0.6 percent.



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