Japan reduces its economy

The Japanese Government has lowered its assessment of the economy of the country after the devastating earthquake and tsunami of last month.

The movement, the first by the party in power of Naoto Kan in six months, was accompanied by a warning that key areas, including industrial production and exports, which are fighting in the near future.

On Monday the IMF reduced its forecast of growth of Japan, while the Japan Bank reduced its assessment of the economy last week, saying that he would remain under "strong pressure on the downside" for some time.
"The economy is showing weakness due to the influence of the great earthquake of Eastern Japan", the Government said in its monthly economic report for April.

Japan is still reeling from the disaster of March 11, which has left 28,000 people dead or missing. More tremors have felt this week and the seriousness of the nuclear crisis on the ground of Fukushima Dai-ichi was raised to the same level as Chernobyl.

Damage to the power plant has led to the successive power outages, affecting production in large companies. The Government warned the downside risks to prospects that could come from such restrictions of energy supply, as well as the slow pace in the restoration of supply chains and the impact of the increase in oil prices.

"The State of the economy is no longer flat or in a dead end, but rather the direction is down," said Shigeru Sugihara, director of macro-economic analysts in the Office of the Cabinet.

The Government hopes that the weakness to continue for the short term, but with a collection of resume along with a recovery in production, reflecting robust overseas economies and the effects of various policy measures.

Masaaki Shirakawa, Governor of the central bank, said that, although the earthquake did not generate a low indebted already the country's financial system, there was "strong downward pressure" in the economy.
Shortly before he spoke, another earthquake of magnitude 7.4 rattle coast north of Japan and rocked buildings in Tokyo on Monday. The nervousness of sent earthquake through world markets, with oil prices falling and the yen against their most traded currencies.

New mirrors later on Monday and this morning triggered fresh selling as stocks tumbled for a second day.

Sentiment was more beaten by an announcement of the nuclear safety of Japan Agency on Tuesday who had raised the seriousness of the nuclear power plant in Fukushima Dai-ichi incident to level 7, the highest on the scale and the same rating as the Chernobyl incident in 1986.
Repeated aftershocks are obstructing the work of recovery at the nuclear site.

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