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Japan exports fall for fifth consecutive month | |
(about 2 hours later) | |
Japan's exports have fallen for a fifth straight month after demand in China and the European Union (EU) weakened. | |
Shipment's fell 6.5% in October, from a year earlier. Exports to China declined 11.6% and were down 20% to the EU. | |
A territorial dispute with China has dented sales to Japan's biggest trading partner, while the EU is being hurt by a continuing debt crisis. | |
Japan's economy is heavily reliant on exports and a slowdown would hurt growth. | |
Analysts said that given the uncertain global economic conditions, Japan's exports may continue to be weak in coming month. | |
"This is basically the new normal that we have to deal with, well into the next year," Martin Schulz of Fujitsu Research Institute told the BBC. | |
The data comes just weeks after Japan reported that its economy contracted in the July to September period. | |
China impact | |
China is the world's second-largest economy and has a huge domestic market that has become vital to many global and regional exporters. | |
Demand from its consumers is seen as key for countries such as Japan, especially in wake of a slowdown in the western economies. | |
However, relations between China and Japan have soured after a territorial dispute flared up in September. | |
It followed Japan's purchase of disputed islands in the East China Sea, known as Senkaku in Japan and Diaoyu in China. | It followed Japan's purchase of disputed islands in the East China Sea, known as Senkaku in Japan and Diaoyu in China. |
The move led to widespread anti-Japan protests in China, which turned violent in some areas with people directing their anger at Japanese brands. | The move led to widespread anti-Japan protests in China, which turned violent in some areas with people directing their anger at Japanese brands. |
October's decline in exports followed a 14.1% drop in September. | |
Analysts said the row may continue to damage trade between the two countries. | |
"You can't expect China to drive Japanese exports the way it used to, because of the boycotting of Japanese products there due to a territorial dispute," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo. | "You can't expect China to drive Japanese exports the way it used to, because of the boycotting of Japanese products there due to a territorial dispute," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo. |
'Out-competed' | |
Exports to the to EU, meanwhile, have now fallen for 13 straight months. | |
Analysts said that as well as the eurozone debt crisis, Japanese exporters were also hurt by the strength of the yen. | |
A strong yen makes Japanese goods more expensive to foreign buyers, and it gained nearly 7% against the US dollar between March and September this year. | |
Though the yen has weakened since then, it continues to remain at a level seen as too high by many businesses. | |
It was trading close to 81.89 yen against the US dollar in Asia trade on Wednesday. | |
"Japan is being out-competed by China, by South Korea and by its Asian neighbours," said Fujitsu Research Institute's Mr Schulz. "This is a problematic situation." |
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