Japan’s exports fall to lowest in 7 years

Last month Japanese exports experienced their biggest decline in seven years which has resulted in the second largest trade deficit in three months.

It is clear that this is a worrying situation, due to the fact that it is very rare for Japan to experience trade deficit at all, and this is further confirmation that the economy is in recession, as a result of major manufacturers having to reduce production in the fear of reduced global demand.

Exports have been the lifeblood of Japan’s economic growth in the last few years, although they have fallen by 7.7 percent from 2007 and this represents the biggest drop since 2001.

Japan followed the US and Europe into recession after its economy contracted for the second consecutive quarter. Meanwhile, growth in China, which is Japan’s largest trading partner, slowed for four quarters.

A report on the emerging markets released today reveals that the global financial crisis has hurt emerging economies and this has affected demand further as exports have fallen for a while in the US and the euro zone, however shipments to China have fallen for the first time since 2005.

The Nikkei 225 Stock Average dropped 4.1 percent as a result of the news that exporters are going to post reduced profits.

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