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End in sight to Japan recession

End in sight to Japan recession article image

A spokesperson for the Japanese Bankers Association says Japan's recession will 'bottom out' around September this year, before economic recovery begins. Association chairman Katsunori Nagayasu says the government's stimulus measures will start to pay off, although bad debts will remain high for some time following: "The economy may bottom out in September, but credit costs and the economy do not move exactly in tandem, so I think bad debts at banks will remain quite high all this year." A rise in credit costs has hindered growth, but analysts expect this will normalise as capital markets recover. "Of course we would like to keep credit cost as low as possible, but that doesn't mean we will tighten our funding. Since the top priority is for the economy to recover, funds should flow smoothly - we will take risks when we can," said Nagayasu. Australia's most valuable export market and the world's second largest economy is currently suffering the deepest recession since World War II.

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