Japan has been steadily scaling its GDP for a while. However, recent GDP data suggest that Japan’s economy has just declined by 0.7%. While the figure might not raise concerns, this is the first decline in over a year, which has certainly left experts on edge.
The more concerning thing about the decline is that economists did see it coming. However, the decline was slightly more surprising and concerning as it doubled the projected figure. The report was shared by the Kobeissi letters on May 16th and immediately created turmoil in the country.
The Implications Of The Decline
The decline could put recessionary pressures on the economy. The chances of that happening have doubled since the impact of reciprocal tariffs has not been accounted for yet. This had a major effect on the yen, dropping by 5% after the announcement. At press time, the Yen to USD value is close to 155.20.
Japan is one of the major global economies. Therefore, Japan’s economic shrinkage has certainly had some far-reaching impacts. Some might even say that it had an immense ripple effect on the global economic landscape.
Therefore, there can be another sharp shift from crypto. Historically speaking, volatile markets have led investors away from the crypto market, as it is still considered to be volatile. Hence, if that happens, there can be another sharp shift in individual sentiments on crypto.
The signs have already become apparent as BTC has dropped by 2.3%, while ETH has declined by 1.8%. Therefore, the chasm can deepen with time, which is seriously concerning.
