Japan October exports disappoint as yen, global slowdown
By Tetsushi Kajimoto
TOKYO (Reuters) - Japan's exports fell at the fastest pace in five months in the year to October and the worse than expected result signaled more weakness ahead as a strong yen and sputtering global growth weigh on the recuperating economy.
Although Japan's economy expanded 1.5 percent in the previous quarter, rebounding from recession triggered by March earthquake and subsequent nuclear crisis, it is expected to slow sharply in October-December. Severe floods in Thailand, a major manufacturing base for many Japanese exporters, are expected to add to global headwinds faced by the world's third-biggest economy.
Exports fell 3.7 percent last month from a year earlier, far more than a 0.3 percent dip forecast by economists and the data follows the central bank's warning that government debt woes in Europe were already hurting Japan and emerging economies.
The October fall follows a 2.3 percent rise in September and was the biggest drop since a 10.3 percent fall in May, with shipments of semiconductors and other electronic goods falling due to strength in the yen.
"The global slowdown stemming from Europe's debt crisis, sluggish IT-related demand and the yen's rise which is driving production abroad were among the factors behind the decline," a finance ministry official said.
He added that the impact of Thai flooding may further hurt Japan's exports in the coming months.
Thai-bound exports fell 5.1 percent, the first annual decline in three months.
The Bank of Japan held fire last week after easing policy by boosting its asset buying scheme in October, but economists say signs of more weakness may put it under pressure to loosen monetary reins further. Continued...