N’S export market stalled in October, failing to grow on the previous month, it was announced yesterday.
Compared to October 2009 Japanese exports grew 7.8 per cent, yet this was below the Bloomberg median projection of 10.7 per cent – and far weaker than September’s year-on-year growth of 14.3 per cent.
Year-on-year improvements peaked in February, hitting a staggering 45.3 per cent.
Rates of growth have been decelerating since – making October the eighth consecutive month in which export growth has decelerated. As exports fell, imports rose, growing by 8.7 per cent on the previous year, and 0.7 per cent on September.
Exports fell to both of Japan’s key trading partners, China and the US. Yet the most drastic decline came in exports to the European Union. In September exports to the region increased by 11.2 per cent, yet last month they actually fell, recording a rate of -1.2 per cent.
The decline could continue, and have a negative effect on Japanese GDP, according to observers. Kyohei Morita and Yuichiro Nagai of Barclays Capital Research “look for a decline in the fourth quarter as a whole. We believe exports – together with private consumption – will cause real GDP to contract during that period,” they added.
Meanwhile, data yesterday revealed that Japan’s core consumer prices fell 0.6 per cent in October from a year earlier, down for the 20th consecutive month, pointing to persistent deflation.