Posted on 21 Dec 2011
Japan's exports fell at their fastest annual pace in six months in November as a persistently strong yen, Europe's sovereign debt crisis and a slowdown in emerging economies weighed on overseas demand.
The decline in exports and a jump in imports tipped Japan's trade balance into a deficit of 684.7 billion yen ($8.8 billion), bigger than forecast and the second straight month in the red, finance ministry data showed on Wednesday.
The weak reading casts doubt over whether Japan can achieve a solid economic recovery early next year, although the central bank is set to stand pat on policy at a rate review on Wednesday to save for now its limited options to support growth.
"This trend of slowing exports will be here to stay for the time being as demand for Japan's mainstay export products, such as machinery and components, is likely to remain sluggish," said Hideki Matsumura, senior economist at Japan Research Institute in Tokyo.
The 4.5 percent annual drop in November exports was bigger than a median market forecast for a 4.0 percent fall, providing little comfort to policymakers as they fret over the widening fallout from Europe's debt crisis on the global economy.
GROWING PAIN
Exports to Asia, which account for more than half of Japan's total exports, fell 8.0 percent from a year earlier on declines in shipments of semiconductors to China, Taiwan and Singapore, a sign of the growing pain from the global slowdown.
Shipments of digital cameras to China and the United States were weak, while slack overseas demand and supply chain disruptions from Thailand's flooding hurt electronic shipments, a finance ministry official told reporters in a briefing.
Total imports rose 11.4 percent, more than the forecast for a 8.7 percent increase, the data showed.
Imports of liquefied natural gas, needed to make up for falling use of nuclear power and rising oil imports, pushed up overall imports, the data showed.
Japan's economy has rebounded from a recession triggered by the March earthquake and tsunami, but is expected to slow sharply this quarter as the boost from companies restoring supply chains and production facilities peters out.
($1 = 77.7400 Japanese yen)
