TOKYO (AFP) ― Japan posted its worst September trade figures in more than 30 years, official data showed Monday, as the global slowdown and a territorial spat with China weighed on the world’s third-largest economy.
Tokyo said its monthly trade deficit hit 558.6 billion yen ($7.0 billion), reversing a year-earlier surplus of 288.8 billion yen, data from the finance ministry showed, as overall exports fell 10.3 percent on-year.
It was the first deficit for September since 1979, when comparable data became available, as demand for everything from chemicals and cars to medical products and computer parts fell away.
Imports rose 4.1 percent due to higher energy imports following nuclear plant shutdowns after last year’s Fukushima atomic crisis. Nuclear power once supplied about one-third of Japan’s energy needs.
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Workers look at an Evergreen Marine Corp. container being loaded at a shipping terminal in Tokyo. (Bloomberg) |
Japan’s export-driven economy is struggling to right itself following the March 2011 earthquake and tsunami disaster, while also suffering from Europe’s debt crisis, slowing Chinese demand and the strong yen.
Shipments to China, which is Japan’s biggest trading partner, tumbled 14.1 percent as demand dropped for Japan-branded products including industrial machinery and cars while a broader economic slowdown in China factored into the weak figures.
Tokyo and Beijing have been embroiled in an increasingly bitter territorial dispute over an East China Sea archipelago, called the Senkakus in Japan and Diaoyu islands in China, which Japan nationalized in mid-September.
The spat has led to thousands of flights being cancelled between the nations, while Japan’s top three automakers said their sales in China plunged last month, with Toyota posting the biggest drop as September sales slumped 48.9 percent on year. Rivals Nissan and Honda also reported double-digit falls.
Two-way trade between the Asian giants topped $340 billion last year, prompting the head of the IMF to warn earlier this month that the shaky global economy could not afford to have the two countries distracted by the dispute.
“The deteriorating relationships with China could prove to be a major blow to the Japanese economy,” Ryutaro Kono, chief economist at BNP Paribas, told Dow Jones Newswires.
“If this problem continues into early next year ... an economic recession would be unavoidable” in Japan, he added.
However, Daiju Aoki, an economist at UBS in Tokyo, said China trade was likely to turn around when the world’s second-largest economy picks up, regardless of the diplomatic flap.
“Japan-China trade has been affected by the bilateral political issue but data from China for September show that its economy was not having a fresh dip but rather heading for a very gradual recovery,” Aoki said.
“I believe this would offset the fallout from the political problem.”
The trade slump with China also came at a time of a broader downturn, said Masahiko Hashimoto, economist at Daiwa Institute of Research.
“We cannot say this is because of the Senkakus issue,” Hashimoto said.
“It may have had an impact but we should watch for next month’s figures before judging it. The key factor in the data was a slowdown in the global economy.”
Weakness in the United States and Europe, two key markets for Japanese products, has also weighed, with US-bound exports up just 0.9 percent in September while shipments to debt-hit Europe dived 21.1 percent.
“What characterizes the latest data is that U.S.-bound exports lost their recent vigor and that China-bound exports worsened,” Aoki said.
“Higher imports of fossil fuels also contributed to the weak data.”
Japan’s shipments to Asia-Pacific ― including China, South Korea, Indonesia, Australia and India ― also weakened as demand slowed in a region that has been a key driver of global growth.
