Japan's economy appears to be at turning point. Real gross domestic product for the April-June quarter grew an annualized 0.4 percent from the previous quarter — much lower than the 4.4 percent for January-March and the 4.1 percent for the October-December quarter. The value of the yen to the U.S. dollar remains near the high level that prevailed 15 years ago, hurting prospects for export-oriented firms.
"Eco-car" subsidies and "eco-point" incentives for purchase of energy-saving products, which helped underpin consumer spending, will end in September and December, respectively. The government and the Bank of Japan must take fiscal and monetary measures to prevent another dip in the Japanese economy.
A Kyodo News survey of 107 major firms — the results of which were released Aug. 16 — shows that 80 percent of them expect the economy to deteriorate in the October-December quarter or in the first quarter of 2011.