RECESSION IN JAPAN

JAPAN’S EXPORTS REACH THREE-YEAR LOW AS RECESSION LOOMS: ECONOMY

Andy Sharp and James Mayger

Bloomberg, November 21, 2012

Japan is suffering its worst year for exports since the global contraction in 2009 as Europe’s crisis, China’s slowdown and a diplomatic dispute with the Chinese hurt manufacturers and deepen the risk of a recession.

Shipments totaled 53.5 trillion yen ($653 billion) for January through October, down 2.3 percent from the same period in 2011, according to data compiled by Bloomberg from Finance Ministry figures released in Tokyo today. The trade deficit for 2012 so far is a record 5.3 trillion yen.

The so-called hollowing out of Japan’s export champions, highlighted by a cut in Panasonic Corp.’s debt rating to one step above junk status by Moody’s Investors Service yesterday, underscores the urgency of kindling domestic demand. Japan’s political parties are facing off ahead of an election next month on how hard to press the central bank to boost stimulus.

“There’s no doubt that Japan’s economy is already in a recession,” said Kiichi Murashima, chief economist at Citigroup Inc. in Tokyo. “Political pressure for further monetary easing is building, and we expect the BOJ to take additional measures in January.”

The yen slid to a seven-month low after the trade data were released, trading at 81.89 per dollar as of 3:36 p.m. in Tokyo after touching 81.97. The Nikkei 225 Stock Average advanced for the fifth time in six trading days, closing up 0.9 percent amid the weaker yen and speculation that the opposition Liberal Democratic Party, led by Shinzo Abe, will form the next government and push the BOJ into increased stimulus.

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