PRECARIOUS POSITION.

Manawatu Standard, Volume LVIII, Issue 230, 27 August 1938, Page 10

PRECARIOUS POSITION.

JAPAN’S FINANCES. EFFECT ON MARKET. Received August 27, 11.60 a.m. LONDON, Aug. 26. Tangible evidence of recovery in the United States has come as a welcome contrast to the European political news and the unsettled, outlook at home. Trade in industrial issues has fluctuated and gilt-edged issues are more than usually quiet, but moderate buying has carried prices above last week’s levels. Reports reaching the city state that Japanese finances are subject to an almost unbearable strain. The official trade figures, which show a decline in exports of 21.5 per cent, for six months, do not tell the whole story, as they include the exports of yen bloc countries.

It is estimated that genuine foreign exports have slumped at least 38.9 per cent. The import surplus, for which Japan had actually to pay from small foreign exchange gold reserves, is fully twice as large as the trade returns suggest. It also appears to be in contrast with the official statistics that Japan has lost 'SO to 60 per cent, of her gold reserves since the war in China. The general belief is that a sharp deterioration in Japan’s economic position is likely in the near future.