Japanese exports slow further in September

| October 25, 2010 | 0 Comments

Government data has today revealed a further slowdown in Japanese exports in September.

While the figures exceeded expectations, exports still grew at their slowest pace this year, as the strong yen weakens demand for exports and threatens the economic recovery.

Exports rose 14.4% in September to 5.84 trillion yen on an annual basis – well below the 45.3% high seen in February.

Meanwhile, imports rose 9.9% to 5.05 trillion yen, the Government said.

Japan’s trade surplus grew 54% in September on an annual basis to 797 billion yen in the month, higher than market expectations of 712 billion yen.

The figures come as the yen continues to hover around a 15-year high against the US dollar – leading to the country’s central bank to take action to weaken its currency.

It was the first time in six years that such action had been taken.

Deflation is also a concern for the Japanese economy. Recent figures revealed Japanese core consumer prices fell 1.0% in August compared with a year ago – representing the 18th consecutive monthly decline that the economy has been in deflation.

Earlier this month, the Bank of Japan cut interest rates to almost zero. The move surprised analysts but the Bank’s measures reflected its concern about deflation.

A short period of deflation (where prices fall rather than increase) could be a serious threat to the economy because it deters consumers and businesses from spending in expectation of falling prices.

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