Japan feels effects of U.S. spending
TEXT OF STORY
Bill Radke: One culprit here is yesterday’s American retail sales report. U.S. consumers pulled way back on spending in September. And when Americans aren’t spending, the makers of anything anywhere shudder. Marketplace’s Scott Tong reports from Tokyo.
Scott Tong: In Tokyo’s financial district, passers-by check out the outdoor stock ticker as an ad for the lottery blares. No one feels like gambling today. This elderly man, Mr. Masuzawa, says the market reflects Japan’s export-led economy — it needs western consumers.
Mr. Masuzawa (voice of interpreter): It’s a global money game, a global economy. And Japan is not a self-sustaining country. It relies on imports and exports. So this will affect the economy in the long term.
A few steps away, this building material supplier is shaking his head.
Material Guy (voice of interpreter): Japan’s bubble days from the 1990’s only affected us. But this is a global bubble. It’s all so interconnected and so complicated, it’s hard to see the bottom.
The port of Yokohama already feels it. In August, Japan had a rare trade deficit, just the second in 26 years. In fact, the world’s number 2 economy is now shrinking.
Masaaki Takada makes parking brakes for the big manufacturers, like Honda and Toyota:
Masaaki Takada (voice of interpreter): We’re having second thoughts about any new investments we’re making. We’re very careful, because things are uncertain.
Asian markets fell across the board today, which makes sense if you think of the region as an interconnected factory. Take that laptop computer you just decided not to buy. The display comes from Japan, where stocks fell 11 percent today. The chips are designed in Korea, down 9 percent today. And the workers who snapped it all together live in China, down 4.
Now if the Asian economies tank, here’s how it haunts you: Weaker consumers out here may stop buying American exports — particularly agricultural products.
Will Hess is with the economic forecasting firm Global Insight:
Will Hess: Whether consumers in broader Asia will rescue the global economy, I think it might be a little bit unrealistic to expect that.
For now, a global recession remains an “if.” But today’s panic scenario is that a fragile U.S. consumer could take everyone down.
In Tokyo, I’m Scott Tong for Marketplace.
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