Outlook For Japan Remains Bleak

The country known as the Land of the Rising Sun won't be rising economically anytime soon. Japan is in a structural recession -- characterized by such realities as low labor productivity (itself a product of overemployment) -- that's not going to be turned around by big spending on infrastructure or income-tax cuts, believes the global economics team at Merrill Lynch & Co. Inc. This won't directly affect the U.S. as much as it will other countries along the Pacific Rim. For example, Japan's economic weakness will directly impact commodity producers Australia, Chile, and New Zealand, says Merrill Lynch.