The Japanese Ministry of Finance posted a trade deficit of 549 billion yen (approx. $6.7 billion) for the month of October today, with the primary cause being a lack of exports to Europe and China. This is the fourth straight month with a deficit, and the 11th month out of the last 13 with the figure in the red. In 2012, so far, only February and June have ended in surpluses.
The $6.7 billion was well over the original forecast of 360 billion yen ($4.4 billion) in deficit that was predicted in September. The Ministry of Finance detailed that October’s exports were down by 6.5% and imports decreased by 1.6%. Shipments to Europe showed a 23.5% drop, a result of the region’s ongoing debt crisis, however the real trouble was in exports to China, which went down by 11.6%.
The decline of exports to China was noticeably better than the 14.1% fall in September, however, as the country is Japan’s largest trading partner, this is still incredibly damaging. The issue is directly tied to the diplomatic tensions between the two countries over the disputed Senkaku/Diaoyu Islands, which were officially purchased by Japan in mid-September. This has led to ongoing boycotts of Japanese products among the Chinese population, especially in the vital auto industry. The worst part is that this sentiment won’t be passing quickly, with analysts predicting a worst-case scenario of China’s boycotts lasting through the first quarter of 2013.
[via RTT News]
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