InsideJapan News Network

Japan's government has downgraded the country's economic forecast for the first time since February 2009.

The latest report shows that the strong yen and a decrease in demand from other Asian nations has lead to a decline in Japan's industrial sector.

Minister of state for economic and fiscal policy, Banri Kaieda, warned that the October to December period could be difficult, although Japan's overall economic growth is expected to show modest progress.

However, the Wall Street Journal reports Mr Kaieda said: "If the strong yen persists for a comparatively long period of time that would be a very serious problem."

The strength of the yen on the international currency market has led to Japanese authorities taking a number of measures to halt its rising value against the US dollar. Since the start of June, the yen has increased by 14 per cent against the US currency.

Bloomberg reports hedge funds looking for distressed assets could consider Japanese opportunities as more companies look for alternative funding.

Written by Susan Ballion