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Deflation Becomes Real Danger In Japan

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By Douglas A. McIntyre Updated Published
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bearJapan’s consumer price index fell 1.1% in May. According to the AP, that is a record drop.

The Japan of 2009 is starting to look like the Japan of the 1990s when real estate prices and the stock market collapsed. It took almost a decade for the nation to get its economy back into shape and the value of equities has never fully recovered.

Demand for Japanese exports is low and bound to stay that way until the economies in the US and EU recover. That is not likely to happen, at least in a robust fashion, anytime soon. And, Japan does not have a stimulus package like the one in China, to help push up consumer demand within its borders.

Japan is not the world’s second largest economy as measured by GDP. At $4.8 billion a year, it is barely ahead of China at $4.4 billion. A year or two of deflation will change that ranking very quickly.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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