Japan exports fall for fifth consecutive month

Protest in Beijing Japanese brands became the target of protests in China in September

Related Stories

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.

Start Quote

Japan is being out-competed by China, by South Korea and by its Asian neighbours”

End Quote Martin Schulz Fujitsu Research Institute

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.

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.

'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."

More on This Story

Related Stories

More Business stories

RSS

BBC Business Live

  1.  
    08:06: SPIRIT PUBS TAKEOVER

    Could this be the beginning of a bidding war? The pub chain has said it has rejected a takeover proposal from Irish cider maker C&C Group today. Spirit is already in talks with brewer and pub owner Greene King about its proposed £723m takeover offer. C&C, the maker of Magners and Bulmers, has until 20 November to announce a firm takeover offer.

     
  2.  
    07:51: PEARSON EARNINGS

    Pearson has reported flat underlying revenue for nine months to the end of September and a 1% fall in in what it calls headline growth for the period. It blames the strength of sterling against key emerging market currencies for the fall. Penguin Random House has performed well in the third quarter, it adds without giving detail. It says the integration of its businesses is "progressing well and is on track to deliver benefits in 2015 and beyond".

     
  3.  
    07:38: HIKMA WARNING

    Hikma Pharmaceuticals says it has received a warning letter US Food and Drug Administration after an inspection at its manufacturing plant in Portugal. "In the letter, the agency raised issues related to investigations and environmental monitoring at the facility," said the firm, which is taking the letter "very seriously."

     
  4.  
    07:26: TSB EARNINGS
    The TSB logo

    Impairments - that is, bad loans - fell to £23m from £32.2m, said TSB. Loans rose 7.7% to £22bn compared to a year ago, but fell from a peak of £23bn six months ago. TSB won 9.7% of all new or switched bank accounts, it said, adding £500m of deposits.

     
  5.  
    07:18: PEARSON FINANCE CHIEF STEPS DOWN

    Robin Freestone, chief financial officer of Financial Times and Penguin Random House owner Pearson has announced he is standing down after 10 years with the firm, including eight in his current role. He will probably leave the firm in 2015 after a successor has been found, said the firm.

     
  6.  
    07:08: TSB EARNINGS

    TSB third-quarter profit before tax fell 14% to £33.1m compared with the same time a year ago, after operating expenses rose. But revenue swelled 18% to £199m

     
  7.  
    06:54: EU PAYMENT Radio 5 live

    Sarah Hewin of Standard Chartered on 5 live says the payment has to be made in the next few months. That could mean more borrowing, she says.

     
  8.  
    06:41: EU PAYMENT Radio 5 live
    British Prime Minister David Cameron

    Sarah Hewin of Standard Chartered is explaining why the UK has to pay an extra £1.7bn to the EU on 5 live. "The UK has been doing better since 1997 than we thought and that's resulted in this extra payment. The Netherlands will pay more, while France and Germany get a rebate."

     
  9.  
    06:29: AMAZON RESULTS Radio 5 live

    Paul Kavanagh of wealth manager Killik is talking about Amazon's loss-making results last night. "It begs the question about what is happening here with this strategy. The shares fell 11% in after hours [in the US]." Investors may be growing tired of ever-more sales expansion with little profit to show for it, he tells 5 live.

     
  10.  
    06:20: CHALLENGER BANKS Radio 5 live

    Paul Kavanagh of wealth manager Killik says it's difficult for banks to persuade customers they offer something new. When a challenger bank succeeds, the larger banks often take the best ideas, he says on 5 live.

     
  11.  
    06:12: CHALLENGER BANKS Radio 5 live

    Steve Davies is still on 5 live. He says challenger banks are forcing their larger competitors to think more about the customer and service - think Metro bank opening on Sundays. Competing on rates is more difficult, he says. TSB results coming up later.

     
  12.  
    06:03: CHALLENGER BANKS Radio 5 live

    Steve Davies of accountants PwC is on 5 live talking about so-called challenger banks. Can they challenge the largest high street banks? "They have to be able to offer something a little bit different," he says. "The challenge is around innovation," he says. Customer is key, he adds.

     
  13.  
    06:00: Howard Mustoe Business reporter

    Good morning. Get in touch via email blizlivepage@bbc.co.uk and twitter @BBCBusiness.

     
  14.  
    06:00: Matthew West Business reporter

    Morning folks. It's Friday, we're nearly at the weekend. But before that, TSB kicks off bank earnings season and Shire has financials out as well. There's also some service sector data but the big bit of data is the first estimate of third quarter GDP. We'll bring you it all as it happens as always.

     

Features

From BBC Capital

Programmes

  • A virtual girlfriendClick Watch

    Using the latest tech to find friends on a night out and meet a virtual girlfriend

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.