Japan reported the largest economic contraction since 1980

Japan reported the largest economic contraction since 1980

It has been a difficult Q2 for Japan

A grim day for Japan, as Cabinet Office published its report regarding the economy's state for the past quarter.

Japan’s GDP fell 7.8% in Q2 due to the pandemic. It is the worst quarterly drop since 1980. Simultaneously, it is more acute than the one reported after the 2009 financial crisis – 4.8%.

Japan, which is the world’s third-largest economy, contracted less than the US and some of the European economies, but more than its Asian peers. The US economy shrank 9.5% in Q2, while, on average, the European economies contracted roughly 10%.

In Asia, signs of economic improvement have already emerged. In China, the GDP rose 11.5%, while South Korea reported a 3.3% contraction.

On an annualized basis, the GDP contracted 27.8%. But experts believe that the economy probably started to grow again, as businesses began to reopen.

Japan225 fell by 0.8% following the report. USD/JPY traded at 106.55.

Read more about how other economies have performed in Q2 here!

Sources: forexfactory.com, www3.nhk.og.jp, marketwatch.com


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