- Big depreciation of currency.
- Deep recession continues.
- Multi-year government stimulus program (aimed at prolonging a consumption & credit-led boom) has failed, and all that's left is a huge budget deficit.
- Produces 10m barrels per day, but consumes 25% of them.
- Believed that at current consumption rate, given reserves and estimated extraction potential, set to become a net oil importer by 2025/30.
- Hence government is making announcements about investing in solar and wind energy + the need to phase out fossil fuel use by 2050.
- Problem for Japan is that economy is looking better but still no signs of much-needed in inflation (big fear is for deflation coming back to spook the economy).
- Central bank (BoJ) recently saying economic outlook ok and signs some signs of inflation, so therefore monetary easing on hold.
- IMF warning recovery is weak hence 3 arrows of Abenomics should continue (and therefore monetary easing should continue).
- Consensus seemed to be rate rise for June.
- But now emerges growth was weaker 1Q15 than expected.
- Reduces likelihood of June rate rise.
- Record balance of payments deficit recorded 1Q15.
- China exports more than it imports, so usually has a large trade surplus.
- But funds being drawn out of the country exceed this.
- International investor concerns about slowing China economy, so China stock-market looks less attractive.
- Strong US$ has been a big and obvious trade, i.e. since the rest of the world is still cutting interest rates, but the US is poised to raise them, the US$ has surged.
- Interest rates have been falling fast in China, hence making their currency less attractive.
- Biggest in US.
- If it was a country, would be 12th biggest in the world.
- Roughly same size as Italy, India and Canada.
- Booming - led by Silicon Valley and housing market.
- Budget surplus, 1m jobs added in last year, unemployment down from 12% in 2010 to 6.5%.
- Medium-term challenges = tech bubble bursting and drought.
- Big surplus (revenue > expenditure) under Jerry Brown.
- Primarily due to revenue surge (levy on wealthy + booming Silicon Valley).
- Resulting in record expenditure plans (primarily on education & drought relief).
- Has rebounded approx. 40% year-to-date.
- So has reversed just under a third of the 2014 fall.
- Expected that recent rise will run out of steam as US shale industry is rebounding strongly.