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Japan exports take another hit
By Tomoko A. Hosaka |
January 23, 2009, Friday
|
Print Edition
Print Edition
JAPAN'S December exports plummeted in record pace as the global economic slowdown choked off demand for its cars and gadgets.
Exports fell for the third straight month, with December exports down 35 percent from a year ago to 4.83 trillion yen (US$54.27 billion), the Ministry of Finance said yesterday.
The drop surpassed the previous record ?? November's 26.7-percent retreat.
Even demand from emerging markets, which had partly offset declines in North America and Europe, dropped.
The pain is being felt across much of Asia. Singapore non-oil exports tumbled 21 percent in December, the most in almost seven years.
The figures underscore the vulnerability of Asia's export-dependent economies during global downturns and point toward more cuts in jobs, production and profits in the coming months.
Major brands including Toyota Motor Co and Sony Co have slashed thousands of workers and scaled back factory lines.
Japan's economy, already in recession, could shrink further, economists warn.
"Reports such as plant holidays at auto makers suggest further downside for January-March," said Goldman Sachs economist Chiwoong Lee. "In turn, production cuts are likely to spur layoffs in manufacturing and depress the labor market further."
Akira Maekawa, chief economist at UBS Securities in Tokyo, this week downgraded his outlook for Japan, the world's second-largest economy.
He now expects gross domestic product to have contracted by 10.7 percent in the fourth quarter and predicts GDP to decline 2.6 percent this year.
The economic downturn in 2009 "should be much deeper than our original expectation, as we assess that external demand for Japan's exports, which had been the growth driver for the past few years, should be deteriorating faster than we had originally anticipated," Maekawa said.
The strong yen has also taken a toll on exporters. While the dollar bought about 113 yen a year ago, it now gets about 90, meaning Japanese products are more expensive abroad and the value of overseas profits is lower.
Exports fell for the third straight month, with December exports down 35 percent from a year ago to 4.83 trillion yen (US$54.27 billion), the Ministry of Finance said yesterday.
The drop surpassed the previous record ?? November's 26.7-percent retreat.
Even demand from emerging markets, which had partly offset declines in North America and Europe, dropped.
The pain is being felt across much of Asia. Singapore non-oil exports tumbled 21 percent in December, the most in almost seven years.
The figures underscore the vulnerability of Asia's export-dependent economies during global downturns and point toward more cuts in jobs, production and profits in the coming months.
Major brands including Toyota Motor Co and Sony Co have slashed thousands of workers and scaled back factory lines.
Japan's economy, already in recession, could shrink further, economists warn.
"Reports such as plant holidays at auto makers suggest further downside for January-March," said Goldman Sachs economist Chiwoong Lee. "In turn, production cuts are likely to spur layoffs in manufacturing and depress the labor market further."
Akira Maekawa, chief economist at UBS Securities in Tokyo, this week downgraded his outlook for Japan, the world's second-largest economy.
He now expects gross domestic product to have contracted by 10.7 percent in the fourth quarter and predicts GDP to decline 2.6 percent this year.
The economic downturn in 2009 "should be much deeper than our original expectation, as we assess that external demand for Japan's exports, which had been the growth driver for the past few years, should be deteriorating faster than we had originally anticipated," Maekawa said.
The strong yen has also taken a toll on exporters. While the dollar bought about 113 yen a year ago, it now gets about 90, meaning Japanese products are more expensive abroad and the value of overseas profits is lower.
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