Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Japan goes down under - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 17, 2008

    Japan goes down under

    The Sun seems to have set on this land, at least for the time being. After the US and the UK, it is now Japan's turn to go into a recession, with the country's GDP shrinking during the July to September 2008 quarter. As reported on Bloomberg and other international media, Japan's economy declined by 0.4% during the quarter, the first time since 2001.

    Economists had expected the economy to grow by 0.1% and as such the reality comes as a disappointment. But given the decline in business confidence, and corporate and consumption spending, the results are not far to fathom.

    Economists now project that Japan may be entering into its deepest recession in a decade as the global financial crisis cools demand for its products within the country and overseas. Tough times indeed for the world, as three of its largest economies are now in recession with no clear signs of recovery.

    Interestingly, however, the Japanese benchmark stock index - Nikkei - is currently trading in the positive (up 1%). Other key Asian markets are trading weak, with major losses seen in Hong Kong (down 1.1%) and Singapore (down 0.8%). Hong Kong is also reported to have slid into recession with the economy shrinking by 0.5% during the July to September 2008 quarter.

    As far as India is concerned, voices asking for further interest rate cuts are getting louder. This is as part of the proposed plan to pump the economy by using measures like cuts in interest rate and taxes, and investment in infrastructure. The country's leading corporate leaders are also asking the RBI to cut interest rates further to enable demand to pick up pace again.

    As a matter of fact, the RBI has already cut its benchmark lending rate (repo rate) to 7.5% from 9% over the last month. It has also reduced the cash reserve ratio (CRR) by 3.5% (to 5.5%), thereby freeing up Rs 1,400 bn for banks to lend. Now the fact that inflation (as measured by the Wholesale Price Index or WPI) has declined to its lowest level of 8.9% in over five months, the Reserve Bank Of India (RBI) will have a greater leeway in cutting interest rates further.

    On the other hand, the fact that credit continues to grow by leaps and bounds (28.5% YoY growth reported in the RBI's latest release) will force the RBI to take a harder look at its next decision, whatever it may be.



    Equitymaster requests your view! Post a comment on "Japan goes down under". Click here!


    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Were You Lured By Mr Market's Bait? (The 5 Minute Wrapup)

    Aug 23, 2017

    Mr Market lured investors into believing they'd bitten into a crash. Did you take the bait?

    Deep State First (Vivek Kaul's Diary)

    Aug 23, 2017

    Nowhere was the darkness deeper than in the nation's capital. There, no light shone. No flicker of awareness...observation...learning...or reflection appeared.

    Why Hasn't Warren Buffett Rung the Bell Yet? (The 5 Minute Wrapup)

    Aug 22, 2017

    It's surprising Warren Buffett hasn't warned investors about the expensive stock market? Let us know why.

    Think Twice Before You Keep Money In A Savings Bank Account (Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 23, 2017 (Close)