Japan sees worst trade deficit in Oct. amid China row
TOKYO - Japan marked a 549 billion yen ($6.7 billion) trade deficit in October, the worst for the month, as exports to China and Europe remained weak on soured relations with the Asian neighbor over a territorial dispute and on the sovereign debt crisis in the eurozone, government data showed Wednesday.
The goods trade deficit, well above market projection of around 360 billion yen in red ink, was marked for a fourth consecutive month and the largest for October since comparable data was first released in 1979.
Overall exports dropped for the fifth straight month, down 6.5 percent from a year earlier to 5,150 billion yen, on slower shipments of vehicles and general machinery, while imports slid 1.6 percent to 5,699 billion yen, the first decrease in two months, amid falls in crude oil prices, the Finance Ministry said in a preliminary report.
China, Japan's biggest trading partner, has seen widespread boycotts of Japanese products in protest against the Japanese government's purchase in mid-September of the Senkaku Islands in the East China Sea from a private owner. The islets are claimed by Beijing and Taiwan.
The exports to China fell 11.6 percent to 947.8 billion yen, the fifth straight monthly fall, with vehicles down 82.0 percent, the sharpest since October 2001 -- when their shipments plunged 88.3 percent after Prime Minister Junichiro Koizumi's visit to Yasukuni Shrine, a Tokyo memorial honoring convicted Japanese war criminals along with the nation's war dead.
"If the impact from anti-Japanese demonstrations drags on, (Japan's) exports will remain on a weak note," Yuriko Tanaka, economist at Goldman Sachs Japan Co., said in a report.
Exports to China and other Asian countries, which account for some 40 percent of the total, remained sluggish, down 4.9 percent to 2,840.9 billion yen while imports from the region climbed 2.0 percent to 2,684.5 billion yen.
The global economic downturn following the fiscal and banking problems in the euro area has also continued to weigh on Japanese exports and production. Analysts say the Chinese economy has shown signs of picking up but remained stagnant due largely to its slower exports to Europe.
A ministry official said the government will carefully consider how long the negative impact on Japanese exports from the development in China and Europe will continue.
Weaker consumer and business sentiments in Europe trimmed the exports to the European Union by 20.1 percent to 508.8 billion yen, the 13th straight month of decline. The shipments of vehicles to Britain and liquid crystal devices to Germany notably fell. Imports from the 27-nation bloc were up 7.3 percent to 576.4 billion yen.
Exports to the United States grew 3.1 percent to 921.1 billion yen, continuing to rise for the 12th straight month, reflecting relative firmness in the world's biggest economy. Cars, auto parts and other industrial components led the expansion. Imports from the country gained 0.1 percent to 504.7 billion yen.
All figures were measured on a customs-cleared basis.