Japan’s Exports Fell the Most in Almost Seven Years

(Video: Associated Press • Story: Bloomberg)

Japan’s exports declined at the fastest pace in almost seven years in October as the intensifying global financial crisis stifled sales of cars and electronics.

Exports, the main engine of Japan’s economic growth in the past six years, fell 7.7% from a year earlier, the biggest drop since December 2001, the Finance Ministry said today in Tokyo. Economists surveyed by Bloomberg News predicted an 8% drop.

The Nikkei 225 Stock Average dropped 4.1% on concern exporters’ profits will deteriorate as the global slowdown spreads to Asia, where Japan’s shipments dropped last month for the first time in six years. Automakers Isuzu Motors Ltd. and Hino Motors Ltd. said today they plan to cut output in response to weaker overseas sales.

“We’re in store for even more depressing export news,” said Kyohei Morita, chief Japan economist at Barclays Capital in Tokyo. “Exports will heavily weigh on Japan’s economy as the impact of the global financial crisis deepens.”

The yen traded at 95.72 per dollar at 12:16 p.m. in Tokyo from 95.88 before the report was published. Japan’s currency has advanced 9.2% since September, eroding exporters’ earnings. Read the rest here.