China may take Japanese fiscal policy hostage.

The fallout from China's slowdown is snaking its way through Asia's economy — and the world — bit by bit, data point by data point. Japanese exports, long considered a strength, just took an enormous hit.

Shipments to the Middle Kingdom plummeted 17 percent in January, the Finance Ministry announced this week. Overall, exports fell 8.4 percent, surpassing the 5.7 percent drop penciled in by economists. That's bad news for domestic bright spots like capital spending.