Japan Is Facing a Major Economic Crisis

Japan, the world’s third largest economy after the United States and China, is heading towards a major economic crisis with a dramatic plunge of its GDP in August. The actual annualized GDP of Japan that has been released on the third week of August fell by 27.8%, well below the record of -17.8% in 2009. This is the lowest reading ever for Japanese economy since 1980, when Japan has started to release comparable figures of its economy performance. 

Analysts  forecasted Japan’s annualized GDP to drop by 27.2%. Japanese quarterly GDP dropped by 7.8% in the April-to-June quarter as analysts expected a -7.6% decline. 

A preliminary GDP has more impact compared to the final figures. 

 Fundamentals of Japanese economy are basing on several aspects such as manufacturing, trading and etc.. that have been frozen during COVID-19, also there is no demand and supply orders for goods and services, which put Japan in an awkward position trying to recover after this current quarter GDP results. 

Due to the worldwide situation currently, countries on global level has been facing several critical circumstances since the pandemic took over, they have to come up with a strategy to recover their own economy. Although GDP results has been the lowest since over forty years, but we expect that it would not have significant influence on the market movements.