Japan's economy, which is the world's third largest, contracted last quarter taking the country to the edge of its first recession in six years. Consumers spent less and exports fell. Japanese GDP shrank an annualized -2.4% in the three months to 30 June after growing +3.2% in the first quarter, according to data released by their Cabinet Office. The Nikkei 225 fell -2.1%, the most this month.Meanwhile, international corporate borrowers are turning to Japan for cash that is becoming increasingly hard to get anywhere else in the world. Sales of so-called samurai bonds may exceed 3 trillion yen this year for the first time since 1996, according to Merrill Lynch. Aggressive marketing of bonds in Japan by well-known brands such as Wal-Mart may be one reason NZ$ denominated uridashi may be out of favour there. Japan accounted for 8.5% of New Zealand's exports in the year to June 30, 2008 and was the third largest buyer of our goods. It also supplied more than NZ$10 billion in uridashi issued in the same period. But their share of both of these key markers is declining.
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