Japan's exports drop by least in year

“A global economic recovery is sustained by worldwide stimulus measures, and the recovery remains fragile. Once those stimulus measures are gone, global demand could cool down again,” said Hiroshi Watanabe, an economist at Daiwa Institute of Research.

Exports dropped 23.2 percent from a year earlier to 5.3 trillion yen (US$60 billion), the 13th straight decline, the Ministry of Finance said. In September, exports fell 30.6 percent. Back in February, they plunged by nearly half.

Shipments of automobiles were down 37.2 percent and exports of steel were off 38 percent — both an improvement from previous months yet also showing that big Japanese employers like Toyota Motor Corp. and Nippon Steel Corp. still face trying times. Imports in October fell 35.6 percent 4.5 trillion yen, resulting in a trade surplus of 807.1 billion yen, the ministry said.

Japan's economy, the world's second-largest, appears to be at a critical juncture as policymakers try to sustain a recovery from its worst recession since World War II. Last week, figures showed the economy expanded at an annualized pace of 4.8 percent in the third quarter, the strongest growth in more than two years. Industrial production has also been recovering after plunging earlier this year in the wake of the global financial crisis.

But Japan's jobless rate is still a high 5.3 percent and salaries and prices are falling. Such deflation may sound positive, but it can erode corporate profits, cause companies to cut wages and also prompt consumers to hold off on purchases on hopes that prices will fall further.

Exports to the rest of Asia, while still down, showed the biggest improvement. They fell 15 percent from a year earlier — the smallest drop since last October — after dropping 30 to 40 percent during the first half of the year. Shipments to China fell 14.3 percent.

Asia has become increasingly vital to Japan's economy. Exports to the rest of Asia totaled 2.88 trillion yen — more than those to the U.S. (874 billion yen) and European Union (668 billion yen) combined.

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