Japanese prime minister Shinzo Abe’s stimulus policy – known as Abenomics – isn’t providing the glorious results that the country was promised.
Japan’s exports dropped hard in April, and manufacturing contracted sharply in its worst performance since Abe came to power in 2012.
Data released yesterday showed exports had fallen 10.1% in April from the same month last year. It’s the most rapid fall in exports in the the last three months.
With a weak yen and China’s soft economy, the export decline suffered hugely with a big drop in car exports to the United States. Although this was caused by damage to the automotive supply chain after the country’s recent earthquakes, the knock-on impact could be severe.
Toyota’s forecast of a 35% drop in net profits stunning Japan’s markets – showing the first time in three years that the manufacturing giant wasn’t going to post record profits.
Import shrinkage of nearly 25% has done nothing to inspire the market.
Tokyo’s failure to get the support of western nations to weaken the strong yen is going to further damage already rough economic conditions.
Abe and the Bank of Japan have been under pressure to spur growth, trying increasingly radical methods to promote growth while analysts and investors public express concerns that the bank is reaching its limits.
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