Prediction of Japan Economy in 2011

Jiji Press – The devastating earthquake that hit northeastern and eastern Japan and subsequent falls in stock prices and rises in the yen’s value have cast a dark cloud over recovery prospects for the Japanese economy.

On Thursday, the 225-issue Nikkei stock average closed below 9,000 on the Tokyo Stock Exchange, while in the foreign exchange market, the dollar briefly sank to a postwar record of 76.25 yen.

Before being hit by the quake last Friday, the Japanese economy had shown signs of emerging from a deceleration phase that had persisted from last autumn.

But the stock sell-off and the yen’s sharp appreciation will deal an additional blow to the quake-battered economy, analysts agree.

The Bank of Japan’s latest “tankan” quarterly survey report for December shows that large manufacturers assume the dollar’s exchange rates for fiscal 2010 ending this month at 86.47 yen on average. (To understand better, please read: What is the Stock Market guide

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