Brave New World

Is Japan turning the corner? 30/04/2009

RGE Monitor provides the following useful summary of positive indicators

March Rise in Industrial Production Apr 30: Japan’s factory production rose 1.6% in March, a larger increase than had been anticipated, the Ministry of Economy, Trade and Industry said in a preliminary report; this was the first gain in industrial output in six months and may be a sign that Japan’s decline in production and exports is slowly coming to an end (MarketWatch) Industrial production is expected to increase by 4.3% in April and by 6.1% in May, according to manufacturers surveyed (MarketWatch)

Economy Watchers’ Survey–  Japan’s Economy Watchers’ Survey is picking up from a bottom in Dec-08. The Watchers’ DI of current conditions tends to lead turning points in the economy by three months, so this turning point may be upon us right now in March-April (Morgan Stanley)

Signs That The Decline In Exports Is Slowing There are signs that the fall in exports is slowing. Thanks to corporate Japan’s agility, inventories have been cut even faster than demand, preparing the ground for a modest rebound in production (FT)

Flexibility In Japan’s Economy Adjustments are happening swiftly in areas that beleaguered companies tackled only slowly during last slump, such as bloated workforces and excessive capacity. Bankruptcies of ‘zombie’ companies long kept alive on cheap credit and an undervalued currency have soared now that credit is harder to get and the yen has risen to a fairer valuation on a trade-weighted basis. And at the end of a decade in which much more use was made of contract and temporary workers, companies are now laying these off fast (Economist)