New economic data from Japan are out later this week, but getting a full picture of what’s actually going on inside that country’s economy tends to be rather tricky. The stakes are high, because Japan’s large economy has real impact on the U.S.
Many Americans seem to think worrying about Japan’s economy went out of style in the 80s, along with Flock of Seagulls haircuts. But even after recent troubles, it is the world’s third-largest economy.
“It’s important for us to understand it because Japan is one of our most significant trading partners,” said Santa Clara University management professor Robert Eberhart.
That means Japanese buy products that support American jobs. And U.S. companies need components Japan makes. So when official Japanese economic numbers recently showed a technical recession, but were then revised to show modest 1 percent growth, it made waves in America.
“The overall slower growth means that any kind of bumps that it hits can easily turn it to negative growth for that period of time,” explained Arthur Alexander, an adjunct professor at Georgetown University and former president of the Japan Economic Institute.
That delicate situation comes as Japan’s trying to fix its economy. And there’s a big debate over whether it’s working. When the economic picture is such a moving target, there’s plenty of ammo for both sides.
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