South Korea's exports to Japan have declined sharply this year as the Japanese yen's weakness, coupled with a stronger Korean won, has reduced demand for Korean goods, data showed on Tuesday.
Shipments to Japan declined 13.32 percent on-year in August this year, dropping for the seventh consecutive month, according to the data compiled by the Korea International Trade Association.
Exports to Japan accounted for 5.94 percent of South Korea's total outbound shipments in August, also down from 7.7 percent in January.
A decline in exports to Japan stemmed from the Japanese yen's weakness and a stronger Korean won, according to market watchers.
The yen has been trending lower against the U.S. dollar making Japanese goods more appealing to consumers in overseas markets amid its "Abenomics" policies, which refer to a mixture of aggressive monetary and fiscal policies preached by Prime Minister Shinzo Abe.
On the other hand, the South Korean won has risen sharply against the U.S. dollar on the back of the country's sound economic fundamentals and continued inflows of foreign capital into the local stock market.
The South Korean economy grew at the fastest pace in over two years in the second quarter by expanding 1.1 percent, meeting an earlier estimate on increased fiscal spending and improved exports.
Japan's exports, meanwhile, are gaining traction on the back of the yen's weakness. Japan's outbound shipments rose 14.6 percent on-year in October following a 12.2-percent on-year rise in July and a 7.4-percent jump in June.
Many of South Korea's export items are in direct competition with Japanese goods in overseas markets. A weak yen makes Japanese products less expensive in global markets, posing a challenge for South Korean exporters. (Yonhap News)
