Japan’s Yen Has Only Begun to Fall

The economic outlook for Japan is not pretty. The country, once the poster child for technological advancement and export strength, has been struggling in both areas.

Take a look at some of the technical analysis below which paints this bleak picture.

Japan’s Exports Are Contracting

Japan is struggling to grow its exports.

While the rest of the United States’ trading partners have expanded exports, Japan’s imports have actually shrunk.

Japan’s Economy: Still Looking for a Bottom

Japan’s GDP has fallen far, with 2014 GDP barely exceeding 2008 levels.

Meanwhile, Japan’s GDP hasn’t stopped contracting.

Semiconductors Point to Further Contraction

Japanese semiconductor consumption has fallen to 2002 levels and is contracting at a faster pace. Basically, Japan is currently irrelevant to the 21st Century digital economy.

For automobiles, give Japan a call.

When it comes to everything else in the digital world, you’d better think twice.

Japan’s demise began with the smartphone and tablet. That’s when the digital economy took over and unfortunately Japan had nothing to offer. Before the smartphone, Japan’s Industrial Production expanded almost every month. After that, Japan’s production contracted almost every month. The ability of a country to make products and deliver services for the digital economy determines that country’s economic growth… and Japan’s is shrinking.

A weak yen will help restore some competitiveness and goose some exports. The problem remains that people want to buy smartphones, tablets and other non-Japanese products.

Sluggish Asian Markets

Japan will continue to struggle with its growing irrelevance in the digital economy, and that’s why the yen is destined to weaken. But Japan isn’t the only one. China, Taiwan, and Korea’s economies depend on the smartphone, and smartphone sales are slowing. Watch the economies of each of these countries begin to stumble – slower production, slower exports, and slower GDP.

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