Japans Recession in the Year 2008 - Essay Example

The stimulus package put together by Japan had a budget of $82 billion (7.2 trillion Yen) to assist in stimulating the nation’s decreased rate of employment, offer inducements for products that are energy efficient as well as assist in giving loans to owners of businesses(Koo,2011).

The government of Japan in May 2009 approved a stimulus of 2 trillion packages for Japanese corporations that were weak as well as less stable. It is ordinary for the Japanese government to help weaker companies. Nevertheless, Japan’s latest recession cannot actually be attributed to a singular occurrence, experts, however, believe that one of the leading reasons could be associated with a fourteen-year high for the Yen in comparison to the dollar. The effect of Japan’s recession greatly altered the country’s market values on nearly all goods and their property market.

Nevertheless, Japan was not the only nation that experienced the effect of recession, other countries like the US and Britain also lost a great amount of exports that were being traded to Japan, in addition to several other imports. Additionally, several Japanese stocks trading in foreign markets also plunged because traders feared losing totally especially the ones who had invested in Japan’s securities market (Koo, 2011). The Japanese government apart from organizing money for the stimulus package also set up a system of strategies to assist in ensuring that the finances were being utilized efficiently.

The government of Japan also spoke on how they were planning to assist those who the recession had affected by providing various steps aimed at bringing the economy back to usual national standards. These steps included offering reduced mortgage interest rates, decreased requirements especially for businesses doing the application for subsidies, extended subsidies by 6 months for energy-efficient vehicles, extended subsidies for appliances that were energy-efficient, expanded government-supported protection for corporations that needed funding from the government, and finally offered incentives for freshly built houses as well as the ones renovated with appliances that were energy efficient(Koo,2011).

Recently Japan’s economy surprisingly slid back into recession as business and housing investment fell following a hike in sales tax, shuffling its capacity to assist in driving the global recovery. Japan, being the world’s 3rd biggest economy suffered a contraction of 1.6% yearly pace in the 3rd quarter (July-Sept), the Japanese government reported on 17th of November this year. The stock market reacted to the news by having the share benchmark of Japan falling by 3% as well as other several Asian markets. This downturn further deepens global insecurity as growth remains sluggish in China in addition to staying obstinately flat in the euro zone. 

Though, a small, island country, Japan is one of the globe’s largest importers of food, in addition to being the 3rd largest purchase of natural gas. Japan surfaced out of its previous recession just as Prime Minister Shinzo Abe assumed official duties in December 2012, promising to end 2 decades of stagnation (Flath, 2014).