US Economy Confidence Soars Despite Japan’s Crisis

March 16, 2011 James Heinsman Hedge Fund News

Even with the recent crisis in Japan, there has been a surge of confidence in America’s economy, as expressed by the Federal Reserve.  This, in spite of what most commentators are saying that following the earthquake and nuclear crisis there is mounting pressure on an “already fragile global economy.”  Japan itself is desperately trying to help the situation, with its central bank having “injected billions of dollars into financial markets.”  Thankfully though, things are starting to improve with news today being that the Nikkei increased to 6.2 percent.

Japan’s Crisis Impacting US Plants

On the other hand, because of what Japan has been through there are US plants owned by the Japanese which are being shut down.  This is going to have a huge negative impact on the US economy since auto and auto parts are comprising over a third of American imports from Japan.  So if Japanese auto factories close down, this is bound to “disrupt production at US plans owned by Japanese automakers.”
In spite of this, America could still come up trumps.  According to chief economist at HIS Global Insight Naiman Behravesh, US auto parts manufacturers could actually benefit if Japanese plants in America substitute American parts for those they usually accrue from Japan.  There are Japanese automakers which are reducing production in American plants as they try to work out the likelihood of being able to actually acquire parts from Japan following the country’s devastation.  Indeed, America’s Subaru plant just announced that there would be no more overtime at its one North American plant, similar to Toyota which did the same.

Federal Reserve, Naiman Behravesh, Subaru, Toyota, US Industry,

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