(Correcting Sept exports to China, paragraph 2, and Koizumi as
former PM, paragraph 8)
* Exports -6.5 pct in Oct yr/yr vs -4.9 pct forecast
* Trade balance -549.0 bln yen vs -360.0 bln yen expected
* Adds to view Japan is already in recession
By Kaori Kaneko
TOKYO, Nov 21 Japan's exports fell in annual
terms for a fifth month in October, hurt by the fallout from a
diplomatic row with China and feeble global demand, a further
sign the economy may be slipping into recession and adding
weight to calls for policy easing.
Shipments to China, Japan's top export market, dropped an
annual 11.6 percent last month after a 14.1 percent fall in
September as a territorial dispute led to a consumer boycott of
Total exports fell 6.5 in October from a year earlier,
sharper than a 4.9 percent fall forecast by economists, leading
to a fourth straight monthly trade deficit as the world's third
-largest economy struggles with a strong yen and weak demand.
"As the Chinese economy is bottoming out, Japanese exports
are likely to stop worsening and may start picking up from the
next fiscal year," said Takeshi Minami, chief economist at
Norinchukin Research Institute.
"But you can't expect China to drive Japanese exports the
way it used to because of the boycotting of Japanese products
there due to a territorial dispute. Given persistently weak
indicators, the BOJ may ease policy further as early as next
The Bank of Japan kept monetary policy steady at a review on
Tuesday, standing its ground in the face of calls from the
country's likely next prime minister to pursue "unlimited"
easing to revive an economy widely seen in recession.
The central bank also released its monthly report on
economic and financial developments on Wednesday and said it
remained vigilant about the downward pressure on the economy
from the trade issue with China,
Japan's auto exports to China tumbled 82.0 percent in
October from a year ago, the fastest fall since October 2001
when they dropped 88.3 percent, the data showed. That year,
Japan's former Prime Minister Junichiro Koizumi visited the
controversial Yasukuni Shrine for the war dead, which sparked
anger in both China and South Korea.
Demand for Nissan, Honda and Toyota cars in China, the
world's biggest auto market, was virtually halved due to the
protests in September and October.
Exports to Europe fell 20.1 percent in October from a year
ago, down for the 13th straight month. In contrast, exports to
the United States rose an annual 3.1 percent in October, picking
up from a 0.9 percent rise in September.
Japan's imports dipped an annual 1.6 percent last month.
That lead to a trade deficit of 549.0 billion yen ($6.7 billion)
in October, a record deficit for the month of October, and it
was wider than a market forecast of 360 billion yen.
The fourth successive monthly trade deficit will keep alive
questions about how long Japan will be able to fund its large
public debt domestically.
Japan's economy shrank in the September quarter, and a
Reuters poll found analysts think it is slipping into a
recession -- two successive quarters of contraction -- but will
return to moderate growth in 2013 if the global economy
(Additional reporting by Stanley White, Editing by Jonathan