"What is worrying is that even when overseas economies start to improve, Japan's exports don't improve as much as they used to"
- Yasuo Yamamoto, economist at Mizuho Research Institute
Exports from the Japan dropped for the a consecutive month, while trade deficit widened more than initially expected, adding more pressure on the Bank of Japan to expand its asset-purchase programme. Japanese exports fell 4.1% from a year earlier in November, as Eurozone sovereign debt crisis and a sharp drop in exports to China hit external demand. At the same time, imports rose 0.8%, pushing trade deficit to 953.4 billion yen ($11.3 billion), the third-largest on record. Exports are a key driver of nation's economic growth, and a 14.5% drop in shipments to China and a 20% decline to the Eurozone is adding to signs that the world's third largest economy will not emerge from the recession unless the global economy starts to recover.
"We're in a manufacturing-led recession," said Takuji Okubo, Tokyo-based chief economist at Japan Macro Advisors, formerly of Goldman Sachs and Societe Generale SA. "While Abe should be able to help exporters by pushing monetary easing to weaken the yen, he may find it difficult to implement an effective fiscal stimulus package given Japan's mounting debt."
"What is worrying is that even when overseas economies start to improve, Japan's exports don't improve as much as they used to," said Yasuo Yamamoto, economist at Mizuho Research Institute.
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