The economic policy response has been huge. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. The "corona shock" and the Japanese economy -Substantial contraction of the economy expected in … Still, the sheer size of the fiscal stimulus response in Japan is impressive. View in article, Ministry of Finance (Japan) accessed via Haver Analytics and author calculations. Even after the third quarter’s rapid growth, GDP remains 3.5% below its peak in 2020 Q4. “The Japanese economy … For example, consumer expenditure for workers’ households fell 15.5% from a year earlier in May14 despite the surge in disposable incomes in the same month. 28, 2020: April 2020 (full text) [PDF 2,019KB] Apr. In addition, core private-sector machinery orders, an indicator of future business investment in equipment that excludes volatile orders for ships and electric power companies, declined just 0.1% in Q3, but Japan’s Cabinet Office forecasts a steeper decline in Q4.11 Weak profits and excess capacity will also weigh on capex. During times of global panic, investors typically flock toward safe havens such as yen-denominated financial assets. East Asia decouples from the United States: Trade war, COVID-19, and East Asia’s new trade blocs, Japan starts paying firms to cut reliance on Chinese factories, A brewing U.S.-China tech cold war rattles the semiconductor industry, Recalculating the benefits of trade post–COVID-19. However, the spike in Covid-19 cases in Europe and the U.S. casts a shadow over the outlook, potentially dragging on regional exports to key markets at the outset of the year. Exports to the United States, Japan’s second-largest export market, were 0.6% higher than a year earlier in September (figure 2). The pandemic threatens consumers’ recovery, Weak domestic demand weighs on business investment. The Bank of Japan (BoJ) has continued to ease monetary policy through unlimited purchases of Japanese government bonds (JGBs); increased purchases of exchange-traded funds (ETFs), Japanese real estate investment trusts (J-REITs), corporate bonds, and commercial paper; enhanced dollar liquidity; and indirect lending programs.10 The additional monetary stimulus, which amounts to more than 100 trillion yen or US$1 trillion,11 has helped keep shorter-term JGB yields in negative territory despite the rapid rise in the supply of government debt. Available to attest clients under the rules and regulations of public accounting U.S.! 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