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Overview of countries effected by credit, liquidity and inflation; recession conditions – Japan, Spain, Iceland – (update 4)

Posted by Adrian on June 2, 2008

Over the last month or so, there has been a slew of bad data coming out of Japan. From falling machine orders, rising unemployment and general consumer pessimism.

There are bellwether countries that will show signs of economic downturn, or recessionary conditions – obviously effected by the US economic recession.

Japan is up there as a country that has been a definitive reflection of economic hammering via the US recession.

The Yen, is probably a very undervalued currency. But some strength may be found in the Yen when the Bank of Japan may be forced to lift interest rates from the low their of 0.5%. Given that countries like Japan may except sharp slow downs over inflation, as inflation may move into serious territory once oil and food inflation becomes runaway with prices.

Japan’s financial sector was hit hard by the collapse of Subprime mortgage market, from Markwatch

Japanese financial institutions incurred losses totaling more than 1.9 trillion yen ($18 billion) from exposure to U.S. subprime mortgages in the Japanese fiscal year which ended March 31, according to a published report”


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