Japan in recession despite massive QE
Adam Pike, News Editor
16 Nov 2015, 12:53 p.m.
The Japanese economy has contracted for the second consecutive quarter and slid back into recession for the fifth time since the 2008 economic crisis. Policymakers are coming under increasing pressure to increase the size of its current QE program to stop the economy falling into deep recession.
The world’s third largest economy shrank by 0.2% in the second quarter and 0.7% in the third. Analysts said the poor data will put extra pressure on the Central Bank to continue with already massive quantitative easing program. The Japanese Stock market reacted negatively to the news falling 1.1%. Despite printing trillions of Yen and reducing interest rates to near zero the Japanese economy is not recovering.
Here’s the problem. Japan has been on a 35 year debt binge, offshored its industrial base, has an ageing population and economic growth cannot be ignited. QE has not worked and policymakers are running out of options.