Chatham House Report

Project: International Economics Department

Vanessa Rossi

Japan's economy has suffered exceptional damage because of its high level of exposure to the massive downturn in world trade and investment, notably impacting on demand for cars, consumer electronics and investment equipment. The depth of Japan's recession looks set to be far worse than that of the US and the EU.

However, the recession has also radically reshaped the global financial environment in ways that suggest unexpected opportunities for Japanese financial institutions and markets.

This report reviews the outlook for Tokyo as a financial centre and the role of Japan's financial sector in the light of domestic targets as well as international trends and competition.