Why? Weaker demand from Europe and the United States is one reason. Factories being temporarily shut down due to Chinese New Year could be another reason.
Is this seasonal anomaly or one more bad sign coming out of China?
Stay tuned
The article below is in the “alarming” category.
Japan borows more than it raises in taxes, and its debt amounts to two years’ worth of Japan’s economic output.
Japan has the highest debt-to-GDP ratio in the world. Half of the country’s tax income is directed to simply servicing it’s debt.
In addition to Europe and China (which I’ve written about in the past), Japan is one of the next huge players we’ll be unraveling in the future. I have great concerns about investing in Japan, and a Euro-Pacific investment is the most troublesome to me.
Be careful if you have that allocation in your portfolio.
Here’s a great interactive comparison website.
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The deficit levels of the Japan government are among the highest of the developed countries, and expected to increase in the coming years.
This is not good news for Japan. As the rating decreases, the extra premium paid to borrow money goes up. So, a 3% cost of borrow might increase to 4%.
Anyway, this is something to watch as the United States deficit to GDP is increasing rapidly.
CLICK FOR FULL ARTICLE – S&P DOWNGRADES JAPAN FROM AA TO AA-