But while losses from subprime and related areas mount, there is some good news from the economy of the Rising Sun, at last.
It appears we have signs that the rest of the global economy seems able to carry on, regardless of Uncle Sam’s troubles. Both Japanese exports and imports shot up in February, with Japan selling more of its goods to Asia and Europe.
Exports to the US declined – of course, they were down 6 per cent from last year, but exports to China rose by no less than 104.8 per cent.
Japan’s trade surplus with China is now almost half as much again greater than its surplus with the US.
Mind you, the global economy really needs Japan to start importing. But, here too, there was good news, with Japan’s imports up 10.1 per cent.
It’s all very encouraging, but it does not prove the global economy has managed to decouple from the US.
Japan might be selling more abroad, but much of the goods it sells abroad are then used in countries like China as inputs, and the finished manufactured goods are then sold on to the US.
Clearly there are significant time lags in this process, so it is perhaps far too early to tell how much impact a US slowdown will have on the Japanese economy, and in turn the extent to which the global economy has decoupled from the US.
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