Japan Hits Another Recession

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Japan Daily EconomyJapan has unexpectedly hit another hurdle in their economy as Gross Domestic Product falls by 1.6% from July to September. On the other hand, the country was expecting its GDP to rise by at least 2.1%, but it turned out to be a false expectation as the market didn’t turn out the way they wanted it to be.

In that connection, the Japanese Prime Minister Shinzo Abe is expected to call for a snap election to delay the pending tax increase for the next year. It has long been legislated that there would be a tax increase of 10% on 2015 to try to solve Japan’s public debt. However, due to the turn of events, the country is being pressured to put that on hold as economic situations turn for the worse.

First signs of sales tax increase where seen in April, which had a 3% gain. The market hit growth in the second quarter and it appears that it still has its effect on the economy.

In the third quarter, Japan had a loss of 0.4% compared to the previous quarter. This may also be due to a partial weakness in private consumption, which comprises more or less than 60% of the country’s economy.

The snap election is believed to be held as early as December 14, as broadcasted by the Japanese local media.

While the Prime Minister popularity fell, it is expected that he still has a chance of winning the snap election as the opposition remains to be divided on the issue. Since he sat in position in 2012, the prime minister’s popularity has shrunk but despite that, the odds of winning the election are on his favor.

Some analysts say that Japan’s economic downturn is also due to a flaw in what was known as the “Abenomics”.

The “Abenomics” was the brain child of the country’s Prime Minister, Shinzo Abe. Its goal was to get Japan’s falling economy back on the map and start growing again. On the other hand it turned out that the plan had a serious flaw that would set them back into recession once again.


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Jason B Kruger

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Jason B. Kruger is a Professional Trader & Chief Editor for WhyOptions.com, who is considered ‘The Authority’ on Binary Options Trading Strategies, Reviewing Brokers,Providers and their Products.
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