Private consumption had been improving, with car sales resuming an uptrend after the fall following the expiration of subsidies for energy efficient cars, and business fixed investment and housing investment was also starting to pick up from the significant decline after the financial crisis. In other words, before the earthquake it appeared that economic activity in Japan was gradually emerging from its temporary pause.
Developments in Japan’s economy after the earthquake The effects of the Great East Japan Earthquake on March 11 changed the situation considerably. According to Cabinet Office estimates, the amount of damage to capital stock will be about 16 to 25 trillion yen, or about 3 to 5 percent of Japan’s annual nominal GDP.