Japan exports slump on Europe, China; raise global demand worries
By Leika Kihara and Stanley White
TOKYO (Reuters) - Japan's exports slumped the most in six months in July as shipments to Europe and China tumbled, adding to concerns over global demand after a string of dire trade figures from Asia's export engines.
The 8.1 percent annual fall was far deeper than economists' median forecast of a 2.9 percent drop. A 25.1 percent plunge in exports to the struggling European Union, the biggest such drop since Oct 2009, saw Japan post a record trade deficit with the region.
"Europe's debt crisis is the first factor to pull down exports, and the pace of decline is striking. This is comparable to the post-Lehman situation," said Masayuki Kichikawa, chief Japan economist at Bank Of America Merrill Lynch in Tokyo.
"We hoped domestic demand in China would support Japan's economy, but the story is different."
Wednesday's figures add to the case that the bottom of the slowdown in economic growth for Asia's major exporters could well be pushed further back into the third quarter of 2012 from the second quarter.
"That's the way risks are tilting," said Robert Prior-Wandesforde, director of Asian economics at Credit Suisse in Singapore. "It's hard to be optimistic given what's happening in key trading partners."
Exports from Taiwan, a key part of the global technology supply chain, fell for a fifth straight month in July. South Korea, home to major carmakers, computer chip and flat-screen producers, recorded its sharpest fall in exports in July in nearly three years.
China's exports rose just 1 percent in July, undershooting expectations by a big margin. Continued...