Japan slips into recession, becoming the 4th-largest economy, behind the US, China and now Germany.
Japan’s economy is now the world’s fourth-largest after it contracted in the last quarter of 2023 and fell behind Germany.
The government reported the economy shrank at an annual rate of 0.4% in October to December, according to Cabinet Office data on real GDP, though it grew 1.9% for all of 2023.
It contracted 2.9% in July-September. Two straight quarters of contraction are considered an indicator an economy is in a technical recession.
Japan’s economy was the second largest until 2010, when it was overtaken by China’s. Japan’s nominal GDP totaled $4.2 trillion last year, while Germany’s was $4.4 trillion, or $4.5 trillion, depending on the currency conversion.
This is the best summary I could come up with:
The government reported the economy shrank at an annual rate of 0.4% in October to December, according to Cabinet Office data on real GDP, though it grew 1.9% for all of 2023.
"Japan’s top currency diplomat Masato Kanda communicated his displeasure around rapid yen moves which he says could have an adverse effect on the economy.
Mr Kanda even went as far as to suggest deploying FX intervention as a potential solution to the matter," Richard Snow, a market strategist at DailyFX, said.
"Japanese officials previously intervened in the FX market in September and October 2022 when it sold dollars and bought yen to strengthen the value of the local currency.
Cingari also noted that labour shortages represent a bottleneck to economic activity, while a trade-driven recovery is also unlikely amid stagnating export and import dynamics.
“On a more optimistic note, market financing conditions have eased recently, with expectations of continued relief facilitated by more accessible bank lending,” he said.
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