“The muscles of Japanese economy”; Japanese machine is boosting up again
When it comes to technology, we should talk about Japan and its innovation and “weird” technologies that come up every while.
When it comes to automotive’ industry and quality, Japan is there leading the market.
Despite the “shakiness” of economy and the GDP real growth (about -5.3), the country is striving to keep up its role in world wide industrial leading.
With is labor force about 66 million (population about 127 million), it is still keeping a low level of unemployment rate (5.1%), and competing strongly in the market, and keeping the Yen as an essential currency in the international trade.
Japan is one of the top advanced countries that tries to keep its economy strong, and maintains a low level of inflation, and ensuring jobs and life necessaries for its citizens.
However many signals of recovery are still taking place recently, and the “muscles” of Japanese economy are still bold.
As by global economy of yesterday Oct,13th the Japanese machine orders unexpectedly rose during the month of August, signaling that the nation’s recovery is attempting to stave off the downside pressure, which may encourage Japanese companies to increase spending on investment and equipment even as the yen gains.
Japanese machine orders inclined 10.1% in August, compared with the previous 8.8%, beating median estimates for a drop of 3.9%. Orders rose 24.1% in the year ending August compared with a previous of 15.9%.
Surging Chinese demand along with the demand form other emerging nations, has a positive effect on the nation’s economy, and helped Japanese companies’ earnings improve, and prompted companies including Hitachi Construction Machinery Co. (the world’s biggest maker of giant excavators) to adopt plans to increase production.
Moreover, the yen’s gain to a 15-year high versus the greenback, with a signs of slowing growth in the U.S., is threatening the economic recovery especially as the US is a strategic and important trading partner for Japan.
The Bank of Japan decided to take interest rates to "virtually zero" a range of 0.0% to 0.10% to fight deflation. The Japanese monetary policy wants to prop up the recovery by expanding the nation's balance sheet, after the recent report showed the yen's strength is working to prevent economic growth.
Moreover, Japan's government has intervened in the foreign-exchange market for the first time since 2004, selling 2.12 trillion yen in an effort to curb the Yen's advance towards a 15-year high against the dollar and other majors counterparts as the yen's rally holds strong downside risks over the recovery.
Today’s report showed that the stronger currency is holding back Japan’s economic growth, where the nation’s current account surplus narrowed in August. Yet, the Cabinet office said “they are showing signs of picking up from a year earlier orders rose 24 percent”.
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