tag:blogger.com,1999:blog-22110995880366233732011-09-20T11:40:58.975-07:00News Updaternoreply@blogger.comBlogger11100tag:blogger.com,1999:blog-2211099588036623373.post-43453950908322587042011-09-04T02:24:00.000-07:002011-09-04T02:25:16.075-07:00<p class="introduction" id="story_continues_1">Japanese firms cut their investment in business expansion during the second quarter, indicating continued fears about Japan's economic growth.</p> <p>Companies spent 7.7tn yen ($101bn; £62bn) on plant and equipment, a 7.8% decline from a year earlier, <a href="http://www.mof.go.jp/english/pri/reference/ssc/h23.4-6e.pdf">the ministry of finance said</a>.</p> <p>This was the first year-on-year decline in investment in four quarters.</p> <p>Japan's economy is currently in a recession, and has contracted for three consecutive quarters.</p> <p>"There are negative tendencies in the overseas markets due to concerns of a global economic slowdown," Junko Nishioka of RBS Securities told the BBC.</p> <p>"That is driving the negative sentiment among Japanese manufacturers," she added.</p> <span class="cross-head">Yen factor</span><div><span class="cross-head"><p id="story_continues_2">A slowdown in key markets such as the US and Europe has dealt a double blow to the Japanese manufacturers.</p> <p>First, demand from these two markets has declined, hurting growth in Japan's export-dependent economy.</p> <p>To make matters worse, uncertainty about growth in the developed economies has seen investors flee to safe-haven assets such as the yen, sending the value to the Japanese currency to record levels in recent days. </p> <p>The yen has remained strong despite two interventions by the government to try and weaken it. </p> <span class="cross-head">Shifting base?</span> <p>A strong currency not only makes Japanese goods more expensive to buyers but also hurts their profits when they repatriate their foreign earnings back home.</p> <p>Analysts said that a strong currency was deterring firms from expanding their business in Japan. </p> <p>"I think there are signs that Japanese manufacturers are shifting their productions lines overseas," Ms Nishioka said.</p> <p>"Some surveys have indicated that as many as 40% of manufacturers were considering to shift abroad." she added. </p></span></div><div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/2211099588036623373-4345395090832258704?l=ifyouseekpeace.blogspot.com' alt='' /></div>News Updaternoreply@blogger.com0