<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Export-reliant Asia sinks further
</TR><!-- headline one : end --><TR>Japan, S.Korea, China all suffering from fall in global demand for goods </TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
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An office worker praying at a shrine in Tokyo as Japan stares at its worst economic performance in eight decades. The shrinking economy is on course for a spell of deflation next year. -- PHOTO: XINHUA
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->TOKYO: Export-reliant Asian economies showed more signs of weakness yesterday, with Japan's industrial output diving at a record pace and South Korea warning it faces an 'unprecedented crisis' as global demand wilts.
Even the once unstoppable Chinese economy is feeling the strain, with companies recording a sharp slowdown in profit growth in the first 11 months of the year.
Besides Japan's steep fall in industrial output last month, core consumer inflation has fallen faster than forecast, putting the shrinking economy on course for a spell of deflation next year.
The grim outlook could push the Bank of Japan to implement unorthodox monetary easing measures as it has little room left to cut interest rates after reducing them to 0.10 per cent last week.
But Economics Minister Kaoru Yosano said he doubted that any quantitative easing by the Bank of Japan would directly lead to an increase in loans to companies to get the economy moving again.
Facing the worst global economic environment in more than eight decades, Mr Yosano said Tokyo would act flexibly on possible additional spending measures if conditions deteriorated further.
Separately, Finance Minister Shoichi Nakagawa said yesterday that Tokyo will provide credit support to Japanese firms operating in developed countries to help them cope with the global financial crisis.
The plan will be implemented soon, with the government asking the Japan Bank for International Cooperation (JBIC) to provide loans to local firms and branches operating in the developed world.
JBIC, the international wing of the state-owned Japan Finance, has already said it will provide loans, available till the end of March 2010, to exporters dealing in emerging economies and big firms operating in developing countries.
'We decided to take these unprecedented and emergency steps to cope with the current financial and economic situation,' Mr Nakagawa said.
What started last year as a meltdown in the US mortgage market has spread, claiming some of Wall Street's top firms, causing hundreds of thousands of job losses and costing trillions of dollars in stimulus and rescue packages worldwide.
With much of the developed world in recession and emerging economies quickly losing steam, many economists think Japan's export-oriented economy could go through one of its sharpest contractions ever this quarter and next.
Industrial output fell 8.1 per cent in November from a month earlier, the largest fall on record.
A slump in global demand and the rise of the yen have hit Japanese exporters, forcing Toyota Motor, the world's most profitable carmaker until recently, to forecast its first consolidated operating loss.
Over in South Korea, the mood is similarly grim. 'The Korean economy is faced with an unprecedented crisis with exports and domestic demand, the two pillars of economic growth, falling at the same time,' the Ministry of Knowledge Economy said in a New Year report.
It said it would aim to boost 2009 exports to US$450 billion (S$651 billion) from around US$430 billion projected for this year.
Faced with slowing demand from export markets, China needed to take more steps to stimulate domestic consumption, its central bank officials said yesterday. China's over-reliance on investment and exports has been exposed by the global financial crisis.
Profit growth at its industrial firms rose 4.9 per cent in January-November from a year earlier, down sharply from annual growth of 19.4 per cent in the first eight months of the year, data shows.
But Mr Yi Gang, a deputy governor of the People's Bank of China, is confident the economy would find a bottom around the second quarter of next year.
'I am confident about China's growth next year - the growth will be relatively stable at about 8 per cent,' Mr Yi said.
'And inflation will be low.'
REUTERS
<HR width="50%" SIZE=1>
Japan will provide credit support to Japanese firms operating in developed countries to help them cope with the global financial crisis.
</TR><!-- headline one : end --><TR>Japan, S.Korea, China all suffering from fall in global demand for goods </TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
An office worker praying at a shrine in Tokyo as Japan stares at its worst economic performance in eight decades. The shrinking economy is on course for a spell of deflation next year. -- PHOTO: XINHUA
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->TOKYO: Export-reliant Asian economies showed more signs of weakness yesterday, with Japan's industrial output diving at a record pace and South Korea warning it faces an 'unprecedented crisis' as global demand wilts.
Even the once unstoppable Chinese economy is feeling the strain, with companies recording a sharp slowdown in profit growth in the first 11 months of the year.
Besides Japan's steep fall in industrial output last month, core consumer inflation has fallen faster than forecast, putting the shrinking economy on course for a spell of deflation next year.
The grim outlook could push the Bank of Japan to implement unorthodox monetary easing measures as it has little room left to cut interest rates after reducing them to 0.10 per cent last week.
But Economics Minister Kaoru Yosano said he doubted that any quantitative easing by the Bank of Japan would directly lead to an increase in loans to companies to get the economy moving again.
Facing the worst global economic environment in more than eight decades, Mr Yosano said Tokyo would act flexibly on possible additional spending measures if conditions deteriorated further.
Separately, Finance Minister Shoichi Nakagawa said yesterday that Tokyo will provide credit support to Japanese firms operating in developed countries to help them cope with the global financial crisis.
The plan will be implemented soon, with the government asking the Japan Bank for International Cooperation (JBIC) to provide loans to local firms and branches operating in the developed world.
JBIC, the international wing of the state-owned Japan Finance, has already said it will provide loans, available till the end of March 2010, to exporters dealing in emerging economies and big firms operating in developing countries.
'We decided to take these unprecedented and emergency steps to cope with the current financial and economic situation,' Mr Nakagawa said.
What started last year as a meltdown in the US mortgage market has spread, claiming some of Wall Street's top firms, causing hundreds of thousands of job losses and costing trillions of dollars in stimulus and rescue packages worldwide.
With much of the developed world in recession and emerging economies quickly losing steam, many economists think Japan's export-oriented economy could go through one of its sharpest contractions ever this quarter and next.
Industrial output fell 8.1 per cent in November from a month earlier, the largest fall on record.
A slump in global demand and the rise of the yen have hit Japanese exporters, forcing Toyota Motor, the world's most profitable carmaker until recently, to forecast its first consolidated operating loss.
Over in South Korea, the mood is similarly grim. 'The Korean economy is faced with an unprecedented crisis with exports and domestic demand, the two pillars of economic growth, falling at the same time,' the Ministry of Knowledge Economy said in a New Year report.
It said it would aim to boost 2009 exports to US$450 billion (S$651 billion) from around US$430 billion projected for this year.
Faced with slowing demand from export markets, China needed to take more steps to stimulate domestic consumption, its central bank officials said yesterday. China's over-reliance on investment and exports has been exposed by the global financial crisis.
Profit growth at its industrial firms rose 4.9 per cent in January-November from a year earlier, down sharply from annual growth of 19.4 per cent in the first eight months of the year, data shows.
But Mr Yi Gang, a deputy governor of the People's Bank of China, is confident the economy would find a bottom around the second quarter of next year.
'I am confident about China's growth next year - the growth will be relatively stable at about 8 per cent,' Mr Yi said.
'And inflation will be low.'
REUTERS
<HR width="50%" SIZE=1>
Japan will provide credit support to Japanese firms operating in developed countries to help them cope with the global financial crisis.
