Japan exports tumble, gloom spreads

Oct 22 2012, 16:08 IST
Comments 0
SummaryWorsening of exports reflected both global slowdown and anti-Japan protests in China.

Japan's exports tumbled in the year to September at their sharpest pace since the aftermath of last year's earthquake, while the Bank of Japan cut its outlook for local regional economies due to a row with China and weak global demand.

Manufacturers' sentiment in October hit the lowest since early 2010, separate data showed, reinforcing concerns that Japan may slide back into recession as sales to China and Europe sag and rebuilding from last year's earthquake and tsunami disaster loses momentum.

The weak figures pile pressure on the BOJ to stimulate the economy, and it will likely cut its economic forecasts and ponder further easing monetary policy at its October 30 meeting, according to sources familiar with its thinking.

The worsening of exports reflected both the global slowdown and anti-Japan protests in China. Exports will likely fall even further and the trade deficit will grow in October as the impact from the boycotting of Japanese products will play out more clearly in October, said Naoki Iizuka, an economist at Citigroup Global Markets Japan in Tokyo.

The slowdown in exports to China will likely hit sectors such as automobiles, electronics and general machinery harder in the coming months, and that could further dampen Japanese firms' capital spending, added Iizuka, noting that the BOJ was likely to ease policy further next week and cut its estimate of export performance.

Prime Minister Yoshihiko Noda told his cabinet last week to prepare a fresh stimulus package by next month, but the plan's limited scope and lack of detail failed to impress markets.

Exports fell 10.3 percent in the year to September, against a 9.6 percent drop expected by economists, down for four months in a row, as shipments of cars, ships and electronics slumped, Ministry of Finance data showed on Monday.

It matched the decline registered in May 2011 and posted the sharpest fall since April that year after the massive earthquake and tsunami devastated Japan's northeast.

Sino-Japanese ties have deteriorated sharply since last month when a row over disputed islands led to violent anti-Japanese protests across China and badly hurt trade as some Chinese shunned Japanese cars and other products.

Exports to China, which overtook the United States as Japan's top market in 2009, fell 14.1 percent in September from a year earlier, the biggest decline since January. Shipments to the European Union also dropped a striking 21.1 percent as Europe's debt crisis remains entrenched.

Japanese carmakers reported tumbling

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...