Japan’s exports tumbled 36 percent last month — with car shipments falling by half — while imports fell 41.3 percent from a year earlier, the government said yesterday, showing the world’s No. 2 economy remains mired in a deep slump.
Declines in automobile and steel exports were especially pronounced, the Ministry of Finance said. Exports fell for the 11th straight month to ¥4.5 trillion (US$49 billion).
“We are not seeing an improvement in exports due to a continued slump in global demand,” said Hiroshi Watanabe, an economist at Daiwa Institute of Research. “Japan’s exports were particularly hit hard by stagnant demand in Asia and China.”
Imports dropped from a year earlier to ¥4.3 trillion, reflecting weak consumption within Japan, where the jobless rate is at a record high as companies shed workers.
The administration of Prime Minister Yukio Hatoyama is seeking to boost consumption and help households with a range of consumer-oriented proposals, such as cutting tolls on highways and giving families with children US$275 a month through junior high.
However, critics say the Democrats, who unseated the conservatives in last month’s election, don’t have any clear strategy to achieve long-term economic growth.
Japan’s economy managed to climb out of a yearlong recession in the April-June quarter, growing at an annual pace of 2.3 percent. But with the jobless rate at a record 5.7 percent, growth prospects look murky.
The trade figures showed that the monthly trade surplus came to ¥190 billion.
Auto exports last month plunged a staggering 50 percent, while shipments of steel products dropped 43.3 percent, the ministry said.
Exports of light oil products fell 59.9 percent owing to faltering demand in China and Vietnam, it said.
Japan’s US-bound shipments declined 34.4 percent to ¥713.1 billion, marking the 24th straight month of year-on-year decline. Among exported goods to the US, metal products nose-dived 82.2 percent.
Exports to Asia tumbled 30.6 percent to ¥2.6 trillion. Japan’s exports to China were down 27.6 percent.
Japan’s exports to the EU dropped 45.9 percent to ¥514.3 billion.
There is also concern about the impact of a stronger yen, which was trading at about ¥91 per dollar yesterday, compared with a level well above ¥100 a year ago.
The yen’s advance as a safe-haven currency during the global financial crisis has taken its toll on Japanese exports, said Hiroshi Watanabe, an economist at the Daiwa Institute of Research.
The higher yen has undermined the competitiveness of Japanese products on overseas markets, which is a concern because exports are still about one-third below their peak seen in February last year, he said.
“The new government is trying to boost domestic demand but the normal recovery scenario is that higher foreign demand leads to higher industrial production and then to higher capital investment and employment,” he said.
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