Japan’s Retail Trade reading fell -2.7% in the year to December, the lowest in close to four years. Shrinking global demand has pushed companies to cut back production capacity and boosted unemployment, weighing on consumer spending and depressing overall economic growth. Looking ahead, things continue to look bleak for the world’s second largest economy: yesterday, the International Monetary Fund said global economic growth will come to a “virtual standstill” in 2009 to yield just 0.5%, and lowest yet in the postwar period. Such a scenario is likely to substantially prolong the economic downturn for heavily export-oriented countries (Japan included). Indeed, the monthly report from the Bank of Japan asserted that “economic conditions are likely to continue deteriorating for the time being.”
null