The recovery of the Japanese economy, which was supposed to be supported by huge investments in infrastructure damaged by the huge earthquake that ruined much of the northern part of the country, has not materialized. Japan’s Trade Ministry reported that industrial production fell 0.1% in June from May. Production should ramp up as large Japanese plants like those owned by the car companies come back online. International and domestic demand for Japanese manufactured goods, however, is not rising.
The positive rebuilding effects of Japan probably have been offset by the recession in Europe and the rapid slowing of the economies of China and the United States. Japan’s own economy is not robust enough for internal business and consumer demand to offset a lack of exports. So, Japan joins the long list of major economies headed toward recession.
Douglas A. McIntyre