Japan & our Economy

Estefany Galdamez
 Economy
 The Japanese economy is one
of the third largest in the
world.
 Only the USA and China
have a higher GNP.
 The Japanese currency is the
Yen.
 Most important trade
partners are China and the
USA, followed by South
Korea, Taiwan, Hong Kong,
Singapore, Thailand and
Germany.
 Exports
 Japan's main export:
 goods are cars
 electronic devices
 computers. Most
important trade
partners are China and
the USA, followed by
South Korea, Taiwan,
Hong Kong, Singapore,
Thailand and Germany.
 Imports
► Japan has a surplus in ► Major supplier is
its export/import China, USA, Australia,
balance. Saudia Arabia, South
Korea, Indonesia and
► Import goods: the
- raw materials ( oil, United Arab Emirates.
foodstuffs and wood )
 Before the Disaster…

► BeforeJapan's 2011 earthquake, its economy

was just starting to emerge from its deepest
recession since the 1970s. It rebounded strongly
in 2010, when GDP increased by a strong 3% --
 Why Japan's Economy is
Important to the U.S.

► The Bank of Japan has traditionally been the largest holder

of U.S. Treasuries.
► A recession in Japan could cause it to purchase less Treasury
bonds at a time when the U.S. is issuing more bonds to
finance the economic stimulus bill and bailouts. Lower
demand and greater supply of Treasury bonds will cause
yields to rise, thus raising interest rates, further depressing
the housing market.
 March 11, 2011
 8.9-magnitude earthquake
 Triggered a 23-foot tsunami that battered Japan's
coast, killing hundreds and sweeping away cars,
homes, buildings, and boats!
 The Effect
 Japan's economy shrank after the March 11 earthquake
and tsunami disrupted production and prompted
consumers to cut back spending, sending the nation to
its third recession in a decade.( Chronicle of Bloomberg)
 Capital investment dropped 0.9 percent in the first
quarter.
 Japanese & Wall Street
► While the U.S. stock markets fell, the price of oil
was also dropping even as the demand for raw
materials to rebuild Japan is likely to rise sharply
on top of already rising global demand.

► With all the American investments in Japanese

companies, Wall Street was the first to feel the pain
as it reacted to the Japanese markets, which
plunged 16 percent in just two days.
 Crash
► The US demand on Japanese cars has
steadily increased but because of the
earthquake that destroyed tons of factories
Japan has not been able to fulfill that
demand.
 Car Factories

Toyota shares traded in Frankfurt

fell as much as 3.8 percent, the
biggest intraday decline since Jan.
21, to 30.45 Euros as of 10:15 a.m.
local time. Honda dropped as
much as 4.5 percent and Sony slid
as much as 2.5 percent in the
German city.