Japan has worst October trade in 30 years
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TOKYO, Nov 21 AFP
November 21 2012, 5:01PM
Japan has 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 per cent last month.
On Wednesday, finance ministry data showed October's trade deficit nearly doubled to $US6.7 billion ($A6.48 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 per cent.
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 per cent, as car exports plunged.
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.
Imports in October were down 1.6 per cent from a year ago, but Japan has seen its energy bills soar since shutting its nuclear plants after reactors at the Fukushima Daiichi plant went into into meltdown, spreading radiation over a large area.
Japan's economy has been hit by a litany of other problems, including an export-denting strong yen and a fall-off in demand in debt-riddled Europe, with shipments to the European Union falling 20.1 per cent in October.
Exports to the key North American market turned up just 3.4 per cent in October while shipments to Asia - including China, South Korea, Indonesia, Taiwan and India - were down 4.9 per cent as demand slowed in a region that has been a crucial driver of global growth.