Japan Could Face Another Recession: Morgan Stanley's Roach

Because of Japan’s many troubles, before and after the crises that began last week, the Asian nation could face recession again, Stephen Roach, Morgan Stanley’s non-executive chairman Asia, told CNBC Wednesday.

“It’s quite conceivable that there will be another recession. It would be Japan’s fifth since the bubble burst in the early 1990s,” said Roach, who was Morgan Stanley’s Asia chairman previously.

Roach said that last week’s earthquake and tsunami hit a “weak economy with a shock. If you were hitting a strong economy with a shock, it would be able to shrug it off easier.”

For the last 20 years, Japan has been in a period of “relative stagnation,” said Roach, in which it has not only grown less than 1 percent in two decades, but also contracted in 2010. He predicted that the country will face more contraction.

Last year, China surpassed Japan at the world’s second largest economy. The US has the largest economy.

What adds to Japan's woes, said Roach, is its aging, and declining, population. And the nation offers no relief in sight on that accord, because of its restrictive immigration policy.

Roach said that business is continuing in Tokyo, but some companies and industries have been affected more than others.

He also issued a note of caution. "Twenty years later, the post-bubble experience of Japan must give all of us pause for thought, especially those of us in the United States who think it could never happen to us," said Roach.

"These are very devastating events, and there are lessons in Japan that I think a lot of us have failed to learn."