Japan economy shrinks 12.7%

Worst economic performance in Japan since 1974.

Exports plunged an unprecedented 13.9 percent from the third quarter as demand for Corolla cars and Bravia televisions collapsed amid a slump that the Group of Seven nations said will persist for most of 2009. Toyota Motor Corp., Sony Corp. and Hitachi Ltd. -- all of which forecast losses -- are firing thousands of workers, heightening the risk a decline in household spending will prolong the recession.

“The economy is in terrible shape and the scary part is that we’re likely to see a similar drop this quarter,” said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “All we can do is wait for overseas demand to pick up.”

It tells you something about a country that can't generate its own growth and must rely on other nations to do it for them.

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boy they are so dependent on those cars

it's scary. Very dependent upon exports.

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It's more than cars, RO

What you are seeing here is really a result of years of Korea, Taiwan, and China taking market share in things like industrial goods to electronics. At one time, for example, Japan dominated the RAM industry with names like Toshiba, today it's companies like Hynix Semiconductor and Samsung.

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Cheap watches are telling

a large part of the Chinese economic miracle is illusion, because the value added parts of products like watches are produced in Korea, Japan, or Taiwan. Look at a cheap watch. the strap comes from China, but the time piece requires specialized machine and is capital intensive, and most often comes from Japan.

So China's export collapse shuts down the production of these value added parts in Japan and Korea.

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that doesn't quite make sense for me

Wouldn't the inventories of cheap straps exist and China more than willing to produce those straps if the final product sales and exports were happening?

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