Need to curb economic disaster after the worst ear

2022-10-01
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Need to contain economic disaster after the earthquake, Japan's debt level becomes a development bottleneck

need to contain economic disaster after the earthquake, Japan's debt level becomes a development bottleneck

China Construction machinery information

Guide: just as Japanese Prime Minister Naoto Kan said, the earthquake, tsunami and subsequent nuclear leakage are pushing Japan to the biggest crisis after World War II. The earthquake not only brought huge economic losses and casualties, but also made Japan's already heavily indebted finance unsustainable. Although the joint intervention of the seven major industrialized countries (G7)

as Japanese Prime Minister Naoto Kan said, the earthquake, tsunami and subsequent nuclear leakage are pushing Japan to "the biggest crisis after World War II". The earthquake not only brought huge economic losses and casualties, but also made Japan's already heavily indebted finance unsustainable. Although under the joint intervention of the seven major industrialized countries (G7), the yen exchange rate has gradually fallen back to the price range before the earthquake, the uncertainty of the nuclear leak still makes market sentiment full of doubts. On March 24, the exchange rate of the US dollar against the yen continued to remain stable in the region around 81, and the yen exchange rate fell by nearly 5% compared with the high point before the G7 intervention. After the market sentiment calmed down slightly, some optimistic investors also began to rush to buy Japanese stocks, and the stock market rebounded sharply. The Nikkei 225 index rebounded more than 10% from the previous low

however, some cautious investors pointed out that the Japanese government will be forced to borrow heavily in the future, and the total debt, which has exceeded twice the GDP, will become the biggest obstacle to Japan's recovery

aftershocks

the impact of the Japanese earthquake is even greater than the Hanshin earthquake in Japan in 1995. The preliminary estimate of the Japanese government shows that the total cost of repairing or rebuilding collapsed or damaged houses, factories, roads, bridges and other infrastructure in Japan may reach up to 25 trillion yen in the next three fiscal years

the post earthquake reconstruction work will stimulate Japan's economic development, but the raising of huge funds will become a shackle around the neck of the Japanese economy. Governments around the world are trying to reduce fiscal deficits and try to restore fiscal balance. The Japanese government's "reverse drive" will bring more doubts and anxiety to the market

"if the Bank of Japan purchases bonds and leaves the impression of debt monetization in the market, the Treasury bond yield may rise", Bank of Japan governor Shirakawa Fangming warned. As the interest rate level is close to zero, the monetary policy coordination of the Bank of Japan can only be achieved through the asset purchase plan. Although this action is immediate, it is easy to cause concern about "deficit monetization", which will make the Treasury bond yield "rise". If this scenario occurs, the Japanese government's financing costs and fiscal situation will become worse, and may even raise the alarm of Japan's inflation level

at the China Development Forum held on March 19, Douglas, chairman, President and CEO of caterpillar? Oberhaman warned that the appreciation of the yen and its future trend have become a matter of global concern. If many speculative activities lead to inflation in the Japanese economy, it is likely to cause another disaster

in addition, as the nuclear leak has not been completely resolved, its potential impact on the economy cannot be accurately estimated for the time being, which also increases the uncertainty of Japan's economic recovery. On March 23, although the electrical connection of the six reactors of the Fukushima nuclear power plant has been restored, the slow progress of the Japanese government on the nuclear leak still cannot be trusted by the market. At present, radioactive substances above normal radiation levels have been detected in the seawater around the Fukushima nuclear power plant. Radioactive substances exceeding the standard were also found in some local agricultural products (17.07,0.07,0.41%) and food. This has intensified the market's concern about the risk of nuclear leakage

when attending the China Development Forum, New York University professor rurielrubini said that if the nuclear radiation situation worsens, it will have a disastrous impact on Japan. "Because Japan is a very important link in the supply chain of a product produced by continuous improvement, not only cars, but also semiconductors, steel, etc., it will have a great impact on both ends of its supply chain, such as the United States, which needs to import from Japan." Roubini said

for some Asian countries, this impact may be more obvious, especially when the energy price of Nfix ii/nflex/ngarde device is high due to the intensification of geopolitical conflicts, Asian countries will face different inflationary and economic growth pressures. This may lead to subtle changes in the direction of monetary policy in Asian countries

Johanna Dee Chua, chief economist of Citigroup Asia Pacific, believes that the rupture of the supply chain will stagnate the export of some Japanese industries, such as electronic products, automobiles and steel, which will have an impact on the economies of Asian countries and regions that heavily rely on the import of these goods from Japan, and the price pressure of imports will also increase. In her view, among many Asian countries and regions, Thailand is relatively risky because of its main imported products, such as electronic products, steel, auto parts 8 Sample size: 0.1 ⑵ 00mm and chemical products are highly dependent on Japanese exports

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