12/28/2012, 00.00
JAPAN
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With a sluggish economy, Japan waits for Abe's solutions

November economic data show greater deflation and slower industrial output. The new prime minister and his Economy minister slam the Bank of Japan for not doing enough against the crisis.

Tokyo (AsiaNews) - The economy remains the main challenge for Prime Minister Shinzo Abe's new, more hawkish administration. With industrial output falling in November, the world's third largest economy will find itself in a dire situation, like that followed the Second World War, unless the government cuts public debt.

Last month, industrial production fell 1.7 per cent from the previous month, said the Ministry of Economy, Trade and Industry (which are together in Japan, whilst the Finance Ministry was given to Taro Aso, a Catholic) with auto production, electronics and telecommunications contributing to the overall decline.

Automobile production in November dropped by 8.4 per cent from 838,128 a year earlier to 767,530 units, down for the third straight month, the Japan Automobile Manufacturers Association (JAMA) said on Thursday, as a result of lower domestic demand and exports.

New auto sales edged downward by 0.4 per cent in November from a year earlier to 393,942 units following the end of a government's subsidy programme.

Auto exports in November decreased 13.5 per cent to 382,778 units against 442,672 a year earlier, down for the fourth consecutive month because of a strong yen.

Deflation is another problem. For Prime Minister Shinzo Abe, Japan's central bank, the Bank of Japan, has not been doing enough. Low demand for goods and services is reducing prices.

Like his minister, Mr Abe called on the central bank to print "unlimited" yen to help increase consumer prices. However, this could stoke inflation.

 

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