Exports, the main engine of Japan's economic growth in the past six years, fell 7.7 percent from a year earlier, the biggest drop since December 2001, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted an 8 percent drop.
The Nikkei 225 Stock Average dropped 4.1 percent on concern exporters' profits will deteriorate as the global slowdown spreads to Asia, where Japan's shipments dropped last month for the first time in six years. Automakers Isuzu Motors Ltd. and Hino Motors Ltd. said today they plan to cut output in response to weaker overseas sales.
Japan's economy contracted for a second consecutive quarter in the three months ended Sept. 30, following the U.S. and Europe into recessions, as businesses cut spending. Growth in China, Japan's largest trading partner, has slowed for four quarters.
Today's report showed the global financial crisis is hurting demand from the emerging markets that have propped up Japan's export growth as the U.S. and Europe falter. Exports to Asia fell 4 percent, the first decline in more than six years. Shipments to China fell for the first time in three years.
Shipments to Europe plunged 17.2 percent, the largest drop since December 2001, and demand from the U.S. dropped 19 percent. Automobile exports fell 15 percent, the ministry said.
Imports climbed 7.4 percent, causing a trade deficit of 63.9 billion yen ($666 million), the third shortfall this year.