Japan’s industrial output dived at a record pace and core consumer inflation fell faster than forecast in November, putting the shrinking economy on course for a spell of deflation next year. With much of the developed world in recession and emerging economies quickly losing steam, many analysts think Japan‘s export-oriented economy could go through one of its sharpest contractions ever this quarter and next. As exports crumble at an unprecedented pace, Japanese companies are not only halting factory lines but also scrambling to slash jobs, which in turn is hurting domestic consumption.
“Production is falling like Niagara Falls. What’s going on now is beyond what Toyota and Sony had ever imagined.” – Mitsuru Saito, chief economist at Tokai Tokyo Securities.
