Japan

Background: Japan is comprised of 3000 islands located in the Pacific Ocean. It is a consititutional monarchy where the power of the emperor is limited.



According to the CIA World Factbook, the estimated GDP-Purchasing power parity of Japan in 2007 was $4.29 trillion, and the GDP (PPP) per capita was $33,600. Japanese GDP grew at 2.8% in 2007.

In 2008, however, the whole world has been buffeted by rising oil, food and commodity prices. Japan's inflation rate, excluding volatile fresh fruit, fish and vegetable prices rose 1.5% in May 2008, its highest rate since 1998.

"There is no question that this is the worst economic crisis since the end of World War II," said Economy Minister Kaoru Yosano. "The outcome clearly shows that Japan's export-dependent economy has been severely hit."

Martin Schulz, an economist at Fujitsu Research Institute in Tokyo, said the three main pillars that lifted Japan out of the so-called "lost decade" of the 1990s had crumbled — favorable exchange rates, overseas investment and demand, and old industry such steel, cars and chemicals.

To revive the economy, Japan's parliament passed a contentious 4.8 trillion yen ($52.2 billion) extra budget in January that includes business tax credits and a cash payout of 12,000 yen ($133) per Japanese taxpayer.

media type="youtube" key="MhKgpAOrQDQ" height="364" width="445" Important Quotes from News Articles: 1. [] "There are fears that the government will report next week that the Japanese economy shrank even more in the fourth quarter of 2008 than an initial estimate of a 12.7 percent annualised drop."

"Manufacturers were hardest hit, with earnings diving 94 percent."

"Japanese corporate icons such as Sony and Toyota Motor are heading for big losses in the current financial year to March because of weak demand and the strength of the yen, which is bad for their export earnings."

"Aso said it was "extremely difficult" to predict how the labour market would fare from now but said stimulus measures could boost the economy towards the end of this year." "Parliament on Wednesday enacted legislation needed to go ahead with a controversial plan to hand two trillion yen (20 billion dollars) back to the public in cash handouts to fight the recession."