Japan's exports dip for fifth month
Japan's exports fell in annual terms for a fifth month in October, hurt by fallout from a diplomatic row with China and feeble global demand, a further sign the economy has slipped into recession and adding weight to calls for policy easing.
Shipments to China, Japan's top export market, dropped an annual 11.6 per cent last month after a 14.6 per cent fall in September as a territorial row led to a consumer boycott of Japanese goods.
Total exports fell 6.5 in October from a year earlier, sharper than a 4.9 per cent 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 BOJ kept monetary policy steady at a review yesterday, 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.
Exports to Europe fell 20.1 per cent in October from a year ago, down for the 13th straight month. In contrast, exports to the United States rose an annual 3.1 per cent in October, picking up from a 0.9 per cent rise in September.
Japan's imports dipped an annual 1.6 per cent last month. That led to a trade deficit of 549.0 billion yen ($6.7 billion) in October, 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.