Japan's Exports Drop Again, Fueling Recession Fears

Wednesday, 21 Nov 2012 07:19 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Japan's exports fell in annual terms for a fifth month in October, hurt by the fallout from a diplomatic row with China and feeble global demand, a further sign the economy may be slipping into recession and adding weight to calls for policy easing.

Shipments to China, Japan's top export market, dropped an annual 11.6 percent last month after a 14.1 percent fall in September as a territorial dispute led to a consumer boycott of Japanese goods.

Total exports fell 6.5 in October from a year earlier, sharper than a 4.9 percent fall forecast by economists, leading to a fourth straight monthly trade deficit as the world's third -largest economy struggles with a strong yen and weak demand.

"As the Chinese economy is bottoming out, Japanese exports are likely to stop worsening and may start picking up from the next fiscal year," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"But you can't expect China to drive Japanese exports the way it used to because of the boycotting of Japanese products there due to a territorial dispute. Given persistently weak indicators, the BOJ may ease policy further as early as next month."

The Bank of Japan kept monetary policy steady at a review on Tuesday, standing its ground in the face of calls from the country's likely next prime minister to pursue "unlimited" easing to revive an economy widely seen in recession.

The central bank also released its monthly report on economic and financial developments on Wednesday and said it remained vigilant about the downward pressure on the economy from the trade issue with China,

Japan's auto exports to China tumbled 82.0 percent in October from a year ago, the fastest fall since October 2001 when they dropped 88.3 percent, the data showed. That year, Japan's former Prime Minister Junichiro Koizumi visited the controversial Yasukuni Shrine for the war dead, which sparked anger in both China and South Korea.

Demand for Nissan, Honda and Toyota cars in China, the world's biggest auto market, was virtually halved due to the protests in September and October.

Exports to Europe fell 20.1 percent in October from a year ago, down for the 13th straight month. In contrast, exports to the United States rose an annual 3.1 percent in October, picking up from a 0.9 percent rise in September.

Japan's imports dipped an annual 1.6 percent last month. That lead to a trade deficit of 549.0 billion yen ($6.7 billion) in October, a record deficit for the month of October, and it was wider than a market forecast of 360 billion yen.

The fourth successive monthly trade deficit will keep alive questions about how long Japan will be able to fund its large public debt domestically.

Japan's economy shrank in the September quarter, and a Reuters poll found analysts think it is slipping into a recession — two successive quarters of contraction — but will return to moderate growth in 2013 if the global economy rebounds.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

NEWSMAXWORLD.COM
© Newsmax Media, Inc.
All Rights Reserved