This website uses cookies to ensure you have the best experience. Learn more

Japan Economic Growth Essay

1215 words - 5 pages

Japan’s tough economic development of the 1980s ended at the start of the 1990s. At the end of 1980s, irregularities inside the Japanese economic organization had qualified a hypothetical asset price bubble of massive scale by Japanese enterprises, banks and securities corporations. The mixture of extremely high land prices and low interest rates temporarily caused sharp liquidity of the market. This led to enormous borrowing and strong investment mainly in domestic and global stocks and securities. Realizing that this bubble was unsupportable, the Finance Ministry of JAPAN precisely increased interest rates in late 1980’s. This severe course of action metaphorically bursted the bubble, and ...view middle of the document...

Most of these technically insolvent firms were protected from foreign competition and many were small. And they were often better at lobbying local politicians for forbearance than producing what consumers wanted at competitive cost. Most of these enterprises were too much in debt to do much more than stay alive on bail-out funds. Finally, most of these weakening companies became unsupportable, and merging of companies started to take place, turning the four important national banks in Japan. Several Japanese businesses were loaded with huge debts, and it turn out to be very difficult to take loans or credit from the bank. Therefore during the time from 1990 till 2010 was known as "lost decade", this was when the economy slowed down or grew at a miserable rate. Unemployment rates were on the rise, but not at a threatening level. Many Japanese firms substituted a large part of their labour force with temporary workers, who had little or no job security and very few aids. Japan’s economy has not been fully recovered yet and is still making efforts to overcome from this situation.

The “Lost decade” was there for more than 20 years and Japan was trying hard to get back on track. To end the era, it used aggressive monetary easing to depreciate the value of their currency Yen in the global market. The Bank of Japan had retained short-term interest rates somewhere around zero ever since 1999. With quantitative easing, commercial banks were flooded with surplus liquidity to promote private loaning, giving them large stocks of excess capitals, and hence little risk of shortage of liquidity. The BOJ achieved this by purchasing many government bonds than would be essential to fix the interest rate to zero. The Bank of Japan allowed the commercial bank current account balance to increase from ¥5 trillion yen to ¥35 trillion for a 4-year period beginning in March 2001.Bank Of Japan made three times the amount of long-term Japan government bonds it could purchase on a monthly basis. In 2010, the BOJ declared that it would scrutinize the purchase of ¥5 trillion in assets. This was an effort to bring down the value of yen against the U.S. dollar to motivate the local economy by making their exports cheaper.
"While supporting a rise in exports, a further impact of a weaker currency was to raise the price of imported raw materials. Latest data showed that average input costs rose for the fourth month in succession, and at the sharpest rate in over a year- and-a-half. Margins subsequently remained under pressure as a net fall in output charges was recorded for the twenty-first month in a row." 
(A statement in the latest Japan manufacturing PMI report )

Other Papers Like Japan Economic Growth

Japanese Economic Crisis And Deflation Essay

3471 words - 14 pages – INFLATION RATE OF JAPAN 19 G. CHART 6 – DISCOUNT AND LOAN RATES FROM BANK OF JAPAN 20 H. CHART 7 – UNEMPLOYMENT RATE – JAPAN 21 I. CHART 8 – NIKKEI 225 INDEX 21 IX. REFERENCES 22 I. Executive Summary Japan experienced a period of exceptional economic growth becoming an economic powerhouse by the 1980s. However, Japan was not able to carry this economic prowess forward into the 21st century. The Japanese economy lost an entire decade

Macdonalds Essay

630 words - 3 pages JAPAN General information: Capital: Surface area: Official language: Population: Exchange rate: Tokyo 378 thousand sq km Japanese 127.8 million (2011) A$1 = 84.2744 Yen (Apr 2012) 2007 4,356.3 4,293.8 34,099 33,609 2.2 210,967 4.8 18.5 0.1 2008 4,849.2 4,343.3 37,976 34,014 -1.0 157,079 3.2 18.5 1.4 Real GDP growth % 6 4 Exports 40,000 2 0 -2 20,000 -4 Fact Sheet Fact sheets are updated biannually; June and December Head of State

Macro2 Unsw Asg1

1375 words - 6 pages that Asian countries achieved their rapid growth through expansion in inputs rather than growth in inputs as for the long run level of knowledge plays it role. It was a decent prediction that the economic growth will slow down, as based on the data the growth in Korea’s and Japan’s has exhausted after 1980 (1970 for Japan). This is due to the increase in inputs almost hit the cap, as in labour share they could not increase more and more, the

Japan's Gilded Age

3286 words - 14 pages argue precludes American policy, cites shifts in Japanese attitudes away from loyalty to an emperor and instead towards democratic institutions resulting in improved living standards. Although many factors and policies contributed to Japanese economic growth after World War Two, without a shift in attitude from Japanese citizens it would have been impossible to have economic success. The cultural beliefs of Japan that prevailed through world

Quality Practices in Modern China

992 words - 4 pages centralised government to capitalist, moving from an insular to outward looking culture. • Both Japan and China have imported their technology, relying upon imitating the inventions and ideas of others. This is changing however as modern quality management is embraced. • Preference for high growth over low growth. Chovanec (2011) says of Post-W2 Japan that “Inflation was low, and there were no external constraints”. Further, he states that Money

Challenge to Cultural Identity

1338 words - 6 pages to see the benefits inherent in a more modern economic growth period. In addition, the Japanese also did several things within their own country. They officially abolished the class system and established a free and compulsory education system. They began a policy of offering government subsidies to encourage people to start private businesses. They also began putting money into key industries such as textiles. Along with these changes they

Case a New Front in the Battle of Ideas

690 words - 3 pages believed that no equilibrium is possible when prices don’t or can’t adjust. In any country did wages or the price of labor shall be adjust downward in order to increase the demand for labor which should be real employment. 3. Policymakers in Japan, the world third largest economy, must transition their nation away from a manufacturing-dependent model for growth. What industry sectors might emerge as the new drivers of economic growth? Japan has

Econ 332 Abenomics Term Paper

2758 words - 12 pages saw the power and might of its Western contemporaries and aimed to follow in their footsteps. Near the end of the 20th Century, Japan was officially recognized as an economic superpower throughout the world. However, growth never lasts forever and by the 1990s, Japan’s economy had come to a grinding halt due to a massive collapse in both the real estate and stock markets of the Japanese economy and remains in a recession that has lasted till now

Tanunda Wines

1332 words - 6 pages room for growth and improvement in the domestic circuit and the opportunities afforded by the international market, it is suggested that Tanunda focus on its export activities. Out of the four countries identified as potential export markets, it is believed that Japan would make for an attractive market, in terms of risk, efforts, as well as profitability. Rationale The recommendation to develop a comprehensive export strategy

The Changing of the Hong Kong Idols Popularity in 80’s to 90’s and Now

611 words - 3 pages contribution to society. There are around 75% of visitors are coming from the Asia. Besides the increasing of visitors, the idols industry certainly makes the economic growth through the CDs, concert tickets and magazines in the Japan and Korea. Looking back to the Hong Kong, according to our survey, almost 56% of our interviewees are preferred to choose Japan as their first choice to visit, if they were foreign visitors. The second choice is Korea, around 34% of interviewees choose it. Hong Kong only 10% of them would choose it (figure 3.2). We found that it is because Hong Kong lacks of representative to represent Hong Kong to attract the foreign visitors came to Hong Kong.


4150 words - 17 pages negatives to bringing Tayto into the Japanese market via the various forms of market entry. A brief summary of the pros and cons for each analysis is available in Appendix G. The PEST analysis showed that Japan, although being an economic powerhouse, has been in a steady state of slowed growth and decline in the recent years. The Asian financial crisis, high public debt, and the recession have lead to its decline. Conversely it has many

Related Essays

Japanese And Workwomen Essay

529 words - 3 pages Japanese and work Introduction: Japan is suffering from economic stagnation partly due to the failure to bring women into work. According to this article Women’s have the greatest potential, and allowing them to demonstrate their full abilities is the core for Japans growth strategy. Prime Minister Shinzo Abe has brought the issue to the forefront of his economic-growth policy known as "Abenomics," proclaiming a goal to fill 30% of leadership

Economics Development In Japan Essay

2331 words - 10 pages conclusion and where I believe Japan economy will be in the future.   To understand Japan economic boom after the war you must also look at there history.   Without the creation of the industrial economy during the Meiji Japan this economic growth after postwar could have not happened.   To look even closer lets examine the period before called the Tokugawa period, from 1630's until the 1860's.   Smith explains that "during this period Japanese

The Strategies The Meiji Government Used To Achieve Economic Development

641 words - 3 pages constitution. Both these aided in stability and thus economic growth. The creation of a national education system aided in creating stability because it indoctrinated youth in the ideas of loyalty, patriotism, and obedience. Japan's education system at first stressed free thought and the ideas of individual's exploration of knowledge but by 1890 the education system of Japan became a tool for indoctrination into what Peter Duus calls "a kind of

Competitiveness Of Japan Essay

4067 words - 17 pages had experienced tremendously economic growth after World War II until 1980s. Nikkei stock market index has experienced a high hit of 40,000 in Year 1989. After the appreciation of yen, mistakes in fiscal policy and a serious bubble economy in 1990s, Japan fell into recession for more than two decades. To make it worse, the economic crisis in 2008 and March 11, 2011 earthquake and tsunami in Japan were a great hit to the economy. A decline in