Exports suffer greatest fall in six years on China woes


Exports fell for a fourth consecutive month and dropped the most since late 2009, underscoring continued weakness in an economy that contracted in the final months of 2015.

Exports to China, the nation’s largest trading partner, were down almost 18 percent, driving an overall decline of nearly 13 percent in the value of overseas shipments in January from a year earlier. Imports dropped 18 percent, leaving a ¥645.9 billion trade deficit, the Ministry of Finance said Thursday.

Falling exports compound poor sentiment in Japan, where wage gains have stagnated, consumer prices are barely rising and households are reluctant to spend. This year stocks have plunged and the yen has gained more than 5 percent against the dollar amid concerns over China’s slowdown and U.S. growth. This adds to worries about the seesawing nature of Japan’s economy between modest growth and contraction.

“The environment for Japanese exports is looking bad as Japanese companies shift production abroad, the global economy slows and the yen strengthens,” said Yasunari Ueno, chief market economist at Mizuho Securities Co. in Tokyo. “It’s becoming clear that there is no driver to support Japan’s economy.”

While exports to China typically ease in the weeks before the Lunar New Year holiday, and the break came earlier this year, shipments to Japan’s neighbor have dropped for six straight months.

Part of the weakness in the export figure is also because Japanese companies received lower prices for sales of steel and chemical products amid the general downturn in commodity and energy markets, said Atsushi Takeda, an economist at Itochu Corp. in Tokyo

By volume, exports fell 9.1 percent in January from a year earlier, the biggest drop since February 2013, while import volumes declined 5.1 percent.

Earlier this week, gross domestic product data showed the economy shrank an annualized 1.4 percent.

After that, Nomura Securities Co. cut its forecast for Japan’s fiscal 2016 GDP to 1 percent from a previous projection of 1.4 percent. The firm sees a high chance that the Bank of Japan will expand monetary stimulus at its March meeting if the market turmoil continues.

Itochu’s Takeda thinks it is unlikely Japan will fall into a recession, but he said “there are growing downside risks to the economy.”

“Should gains in the yen and declines in stocks continue, they may take a toll on capital spending, exports and consumption.”

  • Kazuhiro Shino

    Japan needs drastic policy to reactivate the economy almost all Japanese traditional spending spree options were failed 230% debts crippled Japan eccentric one of the idea build 5 Las vegas style Casino by British style regulated in major island & invite foreign travellers which debilitate Yakuza finance many other options for young & old if law makers had flexible mind Japan need to connect with world most talented & highly regarded part of Japan is not in main stream is weirdest part of Japanese establishment

  • Ahojanen

    I wonder if “bakugai” mass purchase of Chinese tourists is also counted on this export account.

    In any way, I suggest that Japan continue to reduce the level of economic dependence on mainland China.

  • Ahojanen

    I wonder if “bakugai” mass purchase of Chinese tourists is also counted on this export account.

    In any way, I suggest that Japan continue to reduce the level of economic dependence on mainland China.

  • lushnya

    Japan won’t make many money in China, it’s useless way, because the China itself making all it’s money and welfare in Europe and USA – that’s the richest markets on planet. All chinese prosperity based on working to West and on western money when Deng Xiaoping started reforms. It is unbelievable today that China before economical reforms was in fact oil exporter but today it’s the main consumer of oil.
    Japan have the bullet train technology, but don’t have much simpler tube-transport technology for cargo and goods. That is the future transport for business – most countries will stop using trains, ships and airplanes, connect each other like Internet with pipelines filled with capsules which transport goods as the bullet speed and very low energy, cheaply.
    Who on the planet have the ready to use and very big in diameter pipelines with Europe? The answer is Russia. This pipelines was made in 1970’s.
    Japan must cooperate with Russia, because it’s already have many pipelines to China and to Europe which can be used to transport cargo. It’s now used for oil/gas transport, but raw resources dropped so much in price today that even Putin may decide to use pipelines for something more profitable – like cargo transit. And the latest chinese contract for oil pipeline in 2014th makes oil business unprofitable at all. It will be cancelled with scandal, China foolishly agreed not to free oil, but that Russia even pay them for taking oil, that was Putin’s trap to break all ties with shameless neighbor which doesn’t care about it’s reputation.
    Pipelines may be revived as transport but with other content.