- Published on Wednesday, 21 November 2012 19:05
- Written by lecruz
JAPAN
is suffering its worst year for exports since the global contraction in
2009 as Europe’s crisis, China’s slowdown and a diplomatic dispute with
the Chinese hurt the nation’s manufacturers and deepen the risk of a
recession.
Shipments totaled
¥53.5 trillion ($653 billion) for January through October, down 2.3
percent from the same period in 2011, according to data compiled by
Bloomberg from Finance Ministry figures released in Tokyo on Wednesday.
The trade deficit for 2012 so far is a record ¥5.3 trillion.
The so-called
hollowing out of Japan’s export champions, highlighted by a cut in
Panasonic Corp.’s debt rating to one step above junk status by Moody’s
Investors Service on Tuesday, underscores the urgency of kindling
domestic demand.
Japan’s political
parties are facing off ahead of an election next month on how hard to
press the central bank to boost stimulus.
“There’s no doubt that
Japan’s economy is already in a recession,” said Kiichi Murashima,
chief economist at Citigroup Inc. in Tokyo. “Political pressure for
further monetary easing is building, and we expect the BOJ [Bank of
Japan] to take additional measures in January.”
The yen slid to a
seven-month low after the trade data were released, falling to 81.92 as
of 11:10 a.m. in Tokyo, from 81.67 before the report. The Nikkei 225
Stock Average was up 1.1 percent, heading for its fifth gain in six days
amid speculation that the opposition Liberal Democratic Party, led by
Shinzo Abe, will form the next government and push the BOJ into
increased stimulus that weakens the yen.
Exports in October
fell for a fifth month, down 6.5 percent from a year earlier and leaving
a trade deficit of ¥549 billion, the Finance Ministry said. That
compared with the median forecast of 25 economists for a 4.9- percent
decline.
Shipments to China,
Japan’s largest export market, fell 11.6 percent as a territorial spat
over islands in the East China Sea takes its toll on the $340-billion
trade relationship between Asia’s two biggest economies. Exports to the
European Union fell 20.1 percent on year, while those to the US were up
3.1 percent.
“The slump in exports
will probably continue this quarter,” said Yuichi Kodama, chief
economist at Meiji Yasuda Life Insurance Co. in Tokyo. “China’s economy
probably hit a bottom in the July-September period, but its recovery may
be limited this quarter and there’s no sign that Chinese consumers will
stop boycotting Japanese cars.”
Japan’s exports for
the first 10 months of this year are the lowest for the same period
since 2009, even including 2011—when the earthquake in March and
flooding in Thailand crimped production at Japanese manufacturers. While
the yen is at a seven-month low, it is still more than 30 percent
higher than five years ago, hurting exporters’ profits.
Japan will probably
slide into recession this quarter on weakness in domestic consumption
and the decline in exports, which account for about 15 percent of the
economy. Gross domestic product shrank an annualized 3.5 percent last
quarter, and the economy may contract a further 0.4 percent in the final
three months of this year, the third technical recession since 2008,
according to a Bloomberg News survey of economists.
Japanese recessions
are officially defined by a government-charged panel that considers data
beyond figures for gross domestic product.
Bank of Japan Governor
Masaaki Shirakawa on Tuesday pushed back against pressure on the
central bank, criticizing the unlimited easing advocated by Abe and
urging respect for the BOJ’s independence. The central bank held off
from monetary easing after expanding asset purchases in September and
October, switching the focus to a December meeting where more measures
are forecast
In Photo: Containers are stacked at a shipping terminal in Tokyo, Japan. Japanese shipments abroad fell for a fifth month. (Bloomberg)
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