Japan's Economy Shrinks 0.4%, Confirming Recession

[Murrican]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUUg6ckAsM5U&refer=home

Japan's Economy Shrinks 0.4%, Confirming Recession (Update4)

By Jason Clenfield

Last Updated: November 16, 2008 23:00 EST

Nov. 17 (Bloomberg) -- Japan's economy, the world's second largest, unexpectedly shrank in the third quarter, entering the first recession since 2001 as companies cut spending.

Gross domestic product fell an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period.

The slowdown may deepen as the global financial crisis hurts exports, prompting companies from Toyota Motor Corp. to Canon Inc. to slash profit forecasts and cut investments. Japan has the lowest interest rates among the 20 biggest economies and public debt that exceeds 180 percent of GDP, limiting the government's ability to stimulate growth.

``It's only going to get worse,'' said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. ``Japan may be entering its deepest recession in a decade as the global financial crisis cools demand overseas.''

The yen fell to 97.49 per dollar as of 12:57 p.m. in Tokyo from 96.09 before the report. Japan's currency has gained 8.9 percent since the end of September, compounding exporters' woes.

[Murrican]

http://www.canada.com/ottawacitizen/news/bustech/story.html?id=1b8d2c49-663f-4c61-a193-c99f61e26741

No severe recession in Canada: economist

More reason for optimism due to Bank of Canada rate cuts

Eric Beauchesne, Canwest News Service
Published: Tuesday, November 18, 2008

Canada may eventually experience a technical recession, but nothing like the painful downturn it suffered in the early 1990s, says a senior economist with a Canadian bank.

While the U.S. faces a deep consumer-led recession, similar to conditions in the '90s, there is more reason for optimism because the Bank of Canada has been cutting interest rates -- not raising them as it did in the previous downturn -- and the Canadian government is in much better financial shape today to stimulate the domestic economy, said National Bank of Canada economist Yanick Desnoyers.

"As it happens, growth in Canadian domestic demand has only ever crumbled amid monetary tightening by the Bank of Canada, regardless of the duration and severity of the recession in the United States," Mr. Desnoyers said. "Moreover, history teaches us that real GDP growth in Canada has never sunk into a painful recession without domestic demand growth collapsing.

"Consequently, though we are not ruling out the possibility of Canada recording a technical recession, given the severity of the U.S. downturn, brandishing the spectre of a serious recession in Canada akin to those of 1990 or 1982 does not seem warranted," Mr. Desnoyers said.

The relatively upbeat analysis, which flies in the face of fears that the global economy is at risk of suffering a 1930s-style Depression, follows the weekend summit in Washington of leaders of 20 industrialized and emerging economies -- including Prime Minister Stephen Harper -- at which they agreed to measures to stimulate their economies, to not raise any new trade barriers, and to improve regulatory oversight of financial markets.