Japan posts worst October trade data in 30 years
TOKYO - Agence France-Presse
Japan’s October trade deficit nearly doubled to $6.7 bln from a year ago. REUTERS PhotoJapan yesterday posted its worst October trade figures in over 30 years, underscoring persistent weakness in the world’s third-largest economy amid the global slowdown and a spat with China.
Hopes that the nation had cemented its recovery following last year’s quake-tsunami disaster are fading fast amid a string of poor economic data, as the European market -- a key buyer of Japanese cars and electronics -- falls away with only a small uptick in shipments to North America.
A territorial row over islands in the East China Sea claimed by Tokyo and Beijing has also affected the trade balance owing to a consumer boycott for Japanese brands, as China-bound car shipments tumbled 82 percent last month.
Yesterday, finance ministry data showed October’s trade deficit nearly doubled to $6.7 billion from a year ago, coming on top of weakening factory output and after Japan’s economy shrank in the latest quarter, nudging it towards recession. The poor figures have heaped pressure on the Bank of Japan to launch further easing measures to stoke growth, with main opposition leader Shinzo Abe saying he wanted the central bank to buy government bonds.
The BoJ, however, held off fresh policy action and kept rates steady on Tuesday, with its chief Masaaki Shirakawa dismissing the proposals from Abe, tipped to become Japan’s next prime minister in December elections.
But the bank also warned that it expected Japan’s economy to stay “relatively weak for the time being”.
“There remains a high degree of uncertainty,” it added.
October’s trade shortfall came to 549 billion yen, expanding from a year-earlier deficit of 283 billion yen as exports fell 6.5 percent. That marked Japan’s worst October trade figures for the month since 1979, when comparable data became available, and the country’s fourth consecutive monthly deficit.
October shipments to China were off 11.6 percent, as car exports plunged.
Auto sales hit
Japan’s top three automakers -- Toyota, Nissan and Honda -- have reported that the row with China has dug into their sales and profits, while major electronics producers have also been sideswiped by fallout from the spat.
“The impact (of the China row) on exports is significant, especially on those of automobiles,” Yoshimasa Maruyama, senior economist at Itochu Corp., told Dow Jones Newswires.
Demand for products that supply China’s public works projects may help exports going forward, but Japan’s post-Fukushima energy bills will cloud the trade picture, said Ayumi Maekawa, senior economist at Mizuho Research Institute.