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Japan's exports fall 4.5% on year in Nov

Updated: 2011-12-21 13:28

(Xinhua)

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TOKYO - Japan's exports fell 4.5 percent in November from a year earlier, marking the second straight month of decline, the Ministry of Finance (MOF) said in a preliminary report on Wednesday.

According to the ministry's data, the trade deficit widened to 684.7 billion yen ($8.79 billion) from 273.8 billion yen in October, above consensus forecasts for a deficit of 440 billion yen.

As exports dropped at the fastest pace in six months due to a persistently strong yen, eurozone sovereign debt woes and economic malaise in emerging economies, imports rose 11.4 percent totaling 5882.4 billion yen in the recording period, the ministry's data showed.

Japan's key export sector has been adversely affected by a persistently strong yen as in times of economic uncertainty investors view the Japanese currency as a safe haven, while short- term speculators look to the yen to pocket quick FX profits, driving up the currency in money markets versus its major counterparts.

In addition, debt contagion in the eurozone has seen the euro drop against the yen, against a backdrop of the global economic slowdown.

As a result, Japanese exporters see their overseas profits eroded when repatriated when the yen is strong and battles to remain competitive on a global stage.

A number of manufacturers here reliant on shipping goods overseas have transferred operations to developing economies where parts and labor costs are more economical, which is also adding downward pressure to Japan's key export sector and economy, finance ministry officials have said.

Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi have called this phenomena a "hollowing out" of Japan's economy and have included allocations in the ?latest supplementary budget draft to address this and policies to curb the yen's appreciation by freeing up more funds for currency interventions.

Noda's Cabinet recently approved a 32.42-billion-US dollar draft fourth supplementary budget, with allocations made to boost the auto industry suffering under the weight of a strong yen, as well as to aid smaller firms battling the yen and reeling after recent floods in Thailand.

The government said it plans to boost funds available to use for currency intervention by 30 trillion yen ($385 billion), as the battle to prevent the yen's strength from undermining Japan's key export sector intensifies.

Japan's Ministry of Finance (MOF) is set to increase the cap on the amount of bills issued to fund currency to 195 trillion yen ($2.5 trillion), with 65 trillion yen being available for further interventions.

The Ministry of Finance on Wednesday also noted that Japan's exports to Asia, which comprise more than half of the nation's total exports, tumbled 8.0 percent in the recording period from a year earlier.

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