Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Thursday, March 12, 2009

Possible inflection point?

Bloomberg has a report headlined Japan’s Funding Crunch Deepening with the key item being that
"The funding crunch for Japanese businesses is intensifying as foreign-currency financing dries up, forcing larger firms to turn to the nation’s state policy bank for emergency loans, the head of the lender said...JBIC, which provides funds to help bolster Japanese companies’ international competitiveness, plans to make emergency loans in cooperation with domestic banks at bank market rates...The bank will receive $5 billion in foreign currency reserves from the government this month to lend to companies as even the largest firms face difficulties getting dollars. The bank may seek additional reserves from the government as JBIC itself faces higher costs for selling foreign-currency bonds."
The government is planning to use some of its foreign currency reserves! Now this is a relatively small amount compared to the government's total holdings, but it might be the start of a long term decrease. If Toyota, which is one of the companies to be included in the program, can't get dollar financing at terms it thinks reasonable, then the rest of the country's industrial sector will be having problems. Given that Japan ran a current account deficit in January, its use of dollar reserves will be something to keep an eye on.