Japanese Exports Fall Sharply in November

Japan’s exports fell the most on record in November, as global demand for cars and electronics collapsed, suggesting that more factory shutdowns and job cuts are likely as the recession deepens. Exports fell 26.7 percent from a year earlier, according to data from the Finance Ministry today. This was thus the largest fall since the data was first published in 1980.

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Exports to the U.S. were down 34 percent and sales to China fell the most in 13 years, helping explain why the Bank of Japan lowered its key interest rate to 0.1 percent last week. Exports to Europe slid 31 percent, the second-biggest drop ever. The yen’s surge to a 13-year high is only making exporters problems worse, and the possibility of government intervention in the currency markets clearly exists.

November's data showed the global recession is now spreading to those emerging markets that had helped prop up Japanese exports as demand from the U.S. and Europe weakened. Exports to Asia fell 27 percent, the most in 22 years, while shipments to China, Japan’s largest trading partner, were down 25 percent, the steepest decline since 1995. Even sales to Russia were down by 6.7% (following a 71% rise in September) revealing the sharpness of the downturn in that country.

Imports were down 14.4 percent, making for their first decline in 14 months, and there was thus a trade deficit of 223.4 billion yen ($2.5 billion), the third such deficit in the last four months.

Comments

[Moon Kil Woong:]

Gee I wonder if lowering interest rates from 0.5% to 0.1% really makes any sort of difference. I suspect not, which leaves the future fed in a very big bind. Thanks Bernake. You crashed interest rates without any meaningful result.

Now the second question arises. Will other countries suspend rational capital markets and start bailing out and socializing all their defunct mismanaged companies like the US is doing? Japan needs not do it for their auto industry. They have well managed, viable, automakers that employ high paid skilled, and open educated people including Americans. Why? Because, their management actually are competent and don't think day to day about how to fly in private jets from point A to B blowing $22 million dollars a year.

Sorry for the diatribe. It's the management and board of directors that need to be replaced in GM and Chrysler, not the workers. And sadly, they will never go willingly. That makes a big statement about the virtues of bankrupcy.

I feel for Japan having to suffer decades of quantitative easing resulting in a lingering recession. Unfortunately, all American seem like we are headed to really feeling for them a whole lot more as we start embracing the exact same measures they have been punished for embarking on.

Can someone please wake me up? And while you are doing it, please try waking Bernake and Paulson up too. They seem to either be in a coma or are zombies making baby zombie companies.

2008 Dec 22 02:13 PM