Japan's Response to the US Financial Crisis

Japan's Response to the US Financial Crisis

The following articles reflect the growing concern in Japan over the continued financial crisis in the USA and possible responses. 

Nikkei plummets 9.62% for a 5-year low
Saturday, Oct. 11, 2008

"The Tokyo stock market took another major mauling Friday, as shockwaves from the global financial storm continued to reverberate around the world."

Aso: Emergency stimulus plan needed quickly

Kyodo News
Friday, Oct. 10, 2008

"Prime Minister Taro Aso instructs the Liberal Democratic Party-New Komeito ruling bloc to compile additional pump-priming measures in preparation for the global financial crisis."

Nakagawa to propose IMF loans plan at G-7
The Yomiuri Shimbun
Saturday, Oct. 11, 2008

"Finance Minister Shoichi Nakagawa is expected to propose in Washington a new emergency International Monetary Fund loan program to help emerging and small economies, sources said Thursday."

Yamato Life goes bankrupt
The Yomiuri Shimbun
Saturday, Oct. 11, 2008

"Yamato Life Insurance Co. filed for bankruptcy protection Friday, making the midsize insurer the first domestic financial institution to go under amid the global financial crisis."

Crunch seen hitting real economy

The Yomiuri Shimbun
Wednesday, Oct. 8, 2008

"The spreading global financial crisis is not only shaking businesses in the country, but also fueling people's concerns over the fate of the domestic economy."

October 6, 2008

After the economic bailout bill was signed on October 3rd, Japan responded with a mixture of optimism and skepticism.   The following articles from the English version of major Japanese newspapers offer insight into the Japanese perspective on the crisis and can be used to spark discussion about the relationship between Tokyo, New York, Washington and your students' hometowns.

Japan's financial chief welcomes passage
Kyodo News
Sunday, Oct. 5, 2008

"Finance Minister Shoichi Nakagawa on Saturday praised the passage of a U.S. financial bailout bill as 'a plus for the U.S. and global financial situations,' but experts in Tokyo expressed skepticism the measure will ease market concerns."

Japan has nothing to fear but fearlessness

Monday, Oct. 6, 2008
Noriko Hama, economist and professor at Doshisha University Graduate School of Business, warns of the potential problems the financial crisis will bring to Japan.

"The accepted wisdom seems to be that Japan is being less affected than most by the ongoing banking crisis. I wouldn't bank on it.

True, for the moment we are not having it as bad as the Americans or the Europeans. Yet there is no room for complacency in this financial meltdown saga. Indeed, the very speed with which the Europeans are suddenly finding themselves at the heart of the turmoil should give us the strongest warning yet of how abruptly and violently this kind of thing can become contagious."

Insurers scramble to snap up Alico
Monday, Oct. 6, 2008
Acquiring Alico is tempting to many Japanese companies due to its significant presence in Japan and compatible management style, yet they also acknowledge the risks involved.

"The life insurance industry in Japan is expected to undergo a major transformation following the announcement that troubled American International Group Inc. (AIG) would sell three life insurance units operating in Japan."

Tokyo shares slide on U.S. bailout, economy worries

Japan Today
Friday Oct. 3, 03:52 PM JST

"TOKYO — Tokyo share prices plunged Friday to their lowest level in more than three years on growing fears that even a passage of the proposed U.S. financial bailout package cannot stop the American economy from slipping into a recession."

October 3, 2008

For some, the current financial crisis in the United States brings to mind the Japanese financial state of the 1990s. This collection of links to Japanese news articles and editorials sheds light on the Japanese reaction to and assessment of the current situation and can be used to spark discussion about the relationship between Tokyo, New York, Washington and your students' hometowns.

ANALYSIS / Bad news is good news for Japan

by Masami Yamamoto and Tetsuji Onoda / Yomiuri Shimbun Staff Writers
Thursday, Oct. 2, 2008

This article gives an overview of the various responses by Japanese financial groups to the financial crisis in the United States.

“Major Japanese financial groups and securities houses have emerged as saviors for troubled U.S. financial firms through capital infusion or partial acquisition. The financial crisis in the United States is regarded as a god-given opportunity for Japanese financial institutions to improve their standing in the international financial marketplace…”

Japan Inc. in payback mode on Wall Street

Resurgent banks in search of overseas action move to scoop up distressed U.S. assets, set up strategic alliances
By KANA INAGAKI / Kyodo News
Thursday, Oct. 2, 2008

This short overview includes recent Japan-US financial history and and Japan's response today.

“Just as the economy was about to lapse into a recession, banking giants staged a stunning comeback with a frenzied series of investments into the cash-strapped U.S. financial sector. A mere five years ago, these same banks were seeking much needed capital from foreign financial institutions to dispose of the bad loans accumulated during the bubble economy of the late 1980s to the early 1990s. Now they're back to return the favor.”

What is needed to make the U.S. financial bailout plan a success

By KENICHI OHMAE / Special to The Japan Times
Thursday, Oct. 2, 2008

Kenichi Ohmae, author of "The Borderless World," "The Invisible Continent" and "The Next Global Stage," compares the current financial crisis in the United States with Japan's experience in the 1990 and offers his conclusions of the lessons learned.

“From the experience of Japan throughout the 1990s, and also from the experience of Nordic countries, it is clear that the U.S. financial crisis is also going through a sequence of events — almost physical and also psychological — that are very similar to what happened elsewhere in the world.”

EDITORIAL: Bailing out Wall Street

Asahi Shimbun
Thursday, Oct 2, 2008

The Asahi Shimbun editors argue that the United States must approve a modified version of the rescue plan in order to ensure the stability of the world financial market.

"It is no exaggeration to say that the global economy is on the brink of depression. Should the failed bailout bill be allowed to simply die, the global financial system could be thrown into total chaos. The U.S. government and the Congress must understand their responsibility. It is crucial that they come up with a revised bill and pass it before the end of this week."

U.S. bailout defeat sends stocks tumbling

Thursday, Oct 1, 2008
Japanese business executives discuss the impact of the US financial crisis on Japan.