Japan: Troubling Economic Figures

Japan's Cabinet Office released new statistics Feb. 16 showing that the country's gross domestic product fell by a seasonally adjusted 3.3 percent in the fourth quarter of 2008 from the previous quarter — which translates to a staggering 12.7 percent drop if annualized. The bulk of the reduction is due to the decline of Japan's exports, but domestic consumption is falling as well, and the combination of these two factors is forcing Japan toward the deflationary spiral it has experienced in the past.