Japan: Dependence on exports leaves Japan vulnerable to credit crunch

Japan may have been less exposed to the direct effects of the credit crunch than major Western economies, but it cannot escape the indirect effects of falling exports. Over the last five years Japan's economic growth has been driven by strong exports to the West and China, which in turn drove profits for Japan's major listed companies four times higher than the depressed levels in the early 2000s to record highs last year. Now that exports are stuttering, as consumers in the West retrench, profits are falling. To make matters worse, Japanese consumers are facing price rises for petrol and...