The global economic crisis, triggered by the collapse of Lehman
Brothers in September 2008, had a huge impact on the
Japanese economy, which experienced negative growth in 2008 and suffered the
worst blow among the developed nations. However, even though the number
of bankruptcies rose sharply, it was still considered relatively less, compared
to the drop in production levels. The reason for this can be attributed to the
extensive economic stimulus measures taken by the Liberal Democratic
Party (LDP) government. Although the economy has been seeing signs of
recovery since spring 2009, the level of economic activity is still low. Japan's
public financial state is the worst among the developed nations, and if a new
economic shock occurs again in the near future, further fiscal expansionary
policies may be difficult. The Democratic Party of Japan came to power in
September 2009, and former LDP's policies have come under review since then.
As long as the uncertainties about the future are not fully dispelled through
the implementation of new growth strategies and pension reform, capital
investments and household consumption are likely to remain stagnant.
The failure of Lehman Brothers in September 2008 triggered a sudden
worldwide economic downturn. The Japanese government labeled this as an
economic crisis that occurs "once in a
hundred years," and began undertaking measures to counter it.
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