Koizumi's reforms on the backburner

Even before the terrorist assault on the US, the Japanese economy was heading rapidly towards its fourth recession in 10 years. Exports had collapsed on the back of the global economic slowdown, and this in turn had depressed private sector capital expenditure and consumer confidence. To exacerbate matters further, the new reformist government under Koizumi had decided to cap public spending in an effort to rein in the rapid growth of national debt. Following the terrorist attacks however, economists have had to trim 0.3% to 0.4% off Japan's growth figures for this fiscal year as the US eco...