Japan's Economy Shrinks More Than Expected

Rising yen, falling international demand, led to 2.3% contraction
By Mark Russell,  Newser Staff
Posted Feb 13, 2012 8:06 AM CST
Japan's Economy Shrinks More Than Expected
Japanese businessmen cross a traffic intersection at downtown Tokyo Friday, Dec. 9, 2011.   (AP Photo/Koji Sasahara)

(Newser) – Economists were expecting the Japanese economy to contract in the last quarter of 2011, but not this badly, reports the BBC. Japan's gross domestic product shrunk 2.3% in the last three months of the year, much worse than the 1.4% economists were predicting, due to the yen rising 7% against the US dollar since April, the effects of last March's earthquake and tsunami, and the general worldwide economic slowdown.

story continues below

"This is a contraction driven by external demand. Exports have fallen a lot because of a triple shock from Europe, the strong yen, and floods in Thailand," said one analyst. And with the Bank of Japan's interest rates so close to zero, at just 0.1%, experts say there is little room for it to influence the economy. (Read more Japan stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.