Japan Exports Plunges, Rates Unchaged

Darlington Musarurwa
22 Jan, 2009
New York City

Japan exports in December plunged, in yet another confirmation of sharp deceleration in international trade among developed nations. Exports to U.S. declined for the sixteen month in a row and to China dropped 36% and Europe declined 42%. The Bank of Japan left rates unchanged.

[R]5:00AM New York, 7:00PM Tokyo- Japan exports drop by record 35% in December to 4.83 trillion yen. Sony forecasts first loss in 14 years.[/R]



Japan Exports Fall Record 35% to 4.83 trillion yen

Ministry of Finance in Japan reported today that the country’s exports plunged by a record 35% in December to 4.83 trillion yen as global demand for goods and services waned.

Exports had earlier dropped 26.7% in November.

Imports in the period declined 21.5% to 5.15 trillion yen, yielding a trade deficit of 320.7 billion yen.

Shipments to the U.S. plunged for the sixteenth month in a row, falling 36.9% in December. Shipments of vehicles plunged 50%, auto parts dropped 41.8% and audio equipment declined 60.9%.

Exports to Europe fell 41.8%, with vehicle shipments dropping 63.4%. Exports to the rest of Asia tumbled 36.4% as semiconductor shipments fell 40 %. Shipments to China plummeted 35.5%.

For the year Japan exports shrank 3.4% and imports soared 7.9%.

Trade surplus contracted 80% to 2.16 trillion yen in 2008 from the same period a year earlier.

Bank of Japan Keep Rates Unchanged

The Bank of Japan reported today that it has unanimously elected to keep its benchmark rate unchanged at 0.1% as economic conditions continue to deteriorate.

The central bank forecasted that the economy will start to stabilize in the latter half of fiscal 2010, with the assumption of medium- to long-term growth and inflation expectations. However uncertainty remains high.

The CPI is estimated to decline by April of this year on declines in petroleum prices and stable food price.

The BoJ also expects the growth rate in fiscal 2010 to rebound to 1.5%.

The central bank decided to purchase 3 trillion yen of corporate short term debt.

Gainers & Losers

Taiyo Yuden led gainers in the Nikkei 225 index shares with a rise of 9.7% followed by increases in Mitsui Sumitomo of 9%, in Clarion Co. Ltd. of 8.1%, in Fast Retailing of 7.5%, and NTT Data Corp. of 7%.

Nitto Boseki led decliners in the Nikkei 225 index shares with a drop of 7.3% followed by losses in Yokohama Rubber of 5.3%, in Fuji Heavy Industries of 4.8%, in Toyota Motor Corp. of 4.2%, and Sanyo Electric of 4/1%.

Sony Forecasts Annual Loss, First in 14 Years

Sony Corp. reported that it has revised downwards its fiscal profit forecast for the year ending March 31, 2009 to a loss of 150 billion yen from the October projection of a profit increase to 150 billion yen.

The company also slashed its sales and operating revenue projection by 14% from October to 7.7 trillion yen.

Profit in the electronics segment is expected to be 350 billion yen lower that the earlier projection as 250 billion yen projected to be eroded by the worsening business environment.

Operating income is equally expected to be lower in the game segment, pictures segment, and financial services segment by 30 billion yen, 13 billion yen and 65 billion yen correspondingly.