Recession Hits Japan

During normal times, I would make an annual trek to Japan for vacationing, visiting friends and researching material for future G-FAN daikaiju eiga articles.

Unfortunately, these aren't normal times.

Last November, I was laid off due to the mortgage meltdown. I am working, but it is at half the salary I normally make. At least I am keeping my head above water until things finally turn around.

As I said, I normally would be headed to Japan for fun and frolic. But even if I were in a normal financial position, I doubt that I would be going to Japan at this time.

The Wall Street Journal is reporting:

Japan has slipped into recession for the first time since 2001, joining Europe in a global economic downturn, as Japanese companies cut spending amid weak exports and consumer demand failed to lift the world's second-largest economy.

Japan's gross domestic product contracted 0.1% in the July-September period compared with the previous quarter, or 0.4% on an annualized basis, according to preliminary data released Monday. That followed a revised 0.9% contraction in GDP, or an annualized 3.7% in the second quarter.

And Reuters reports:

TOKYO, Nov 17 (Reuters) - Japan's economy logged a second straight quarterly contraction in the third quarter as sky-high commodity prices hurt the corporate sector, which had supported the longest recovery of the world's second-largest economy.

The third quarter reading sent Japan into recession for the first time in seven years, under the most commonly used definition of a recession as two consecutive quarters of contraction.

That's bad enough, but the main factor to consider before making a trip now to Japan is the current rate of exchange. Last year, I was able to get around 116 yen per dollar. Right now, the dollar is very weak against the yen and the current exchange rate is 1 USD = 96.7900 JPY. This means that your dollar would not have the purchasing power that it had a year ago. (This is from the XE Exchange website.)

This also means that Japanese vacationers would get more dollars per yen if they should come visit the United States.

So, unless you have the means and just have to make a trip to Japan, it is probably best to wait out this economic downturn until the exchange rate and the U.S. and Japan's economies are on the upswing again.