Exports from Japan dropped at their sharpest levels since the 2011 earthquake and tsunami, falling 10.3% year-to-date in September.
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Sentiment of manufacturers is at its lowest since October of 2010. This means the Japanese economy may slip back into recession as sales have slowed to Europe and China more than the predicted drop of 9.6% by analysts.
The disagreement over ownership of islands between China and Japan is also filtering into the mix.
Chinese boycotts are a big factor as buyers stay away from Japanese autos and other products.
Automobiles, electronics, and general machinery are expected to be the hardest hit sectors.
They are also predicted to dampen capital spending at Japanese corporations, adding pressure for the Bank of Japan to ease monetary policy to stimulate the economy.
Exports to China were Japan’s highest, taking over the US, during 2009. They fell 14.1% in September from a year ago.
Global economic uncertainty continues as Europe tries to put in place a solution to its sovereign debt crisis and exports fall
across the globe as China’s economy also weakens.