Wednesday, July 28, 2004

More doubts arise over the self-sustaining nature of the Japanese recovery.
Japanese retail sales fell in June, government data showed on Wednesday, raising doubts about the strength of personal consumption, which accounts for the lion's share of the economy and is crucial for a sustainable recovery.

Retail sales in June were down 2.9 percent from the same month a year earlier, falling for the fourth month in a row, the Ministry of Economy, Trade and Industry said. That was slightly weaker than economists' consensus forecast of a 2.5 percent drop.
Apparently the Japanese recovery is about as deep as the American recovery in that real wages in Japan are not rising much at all. It's still about exports for Japan, just as it is still about a housing wealth effect in the US. The cheap money approach was supposed to simply be a bridging strategy from recession to self-sustaining growth. Now it looks like the entire world is being asked to live on the bridge. One hopes Halliburton and Bechtel didn't have anything to do with building it . . .

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