Japan is still the third largest economy in the world and is, according to my friends at the CIA, now only the fifth largest exporting nation in the world (or fourth, depending upon how you count these things) after China, the EU, the USA and Germany (the EU isn’t a nation state and its export figures includes German goods and services, of course).
Japan seems to be running to stay still. Exports expanded at their weakest rate in more than a year in the year ended last month, but an increase in the exports to the EU and the US was all but eliminated by a decline in exports to other Asian countries, partially, no doubt, as a consequences of the slowing of the Chinese economy. The value of Japanese exports crawled up by 0.6% in the year to September, but import demand also fell, dropping by 11% partially on the back of low hydrocarbon costs. The actual figures are significantly worse than the 3.8% hike that analysts had been expecting in the Japanese export sector. The September figure was the third consecutive month of weakening growth in the sector.
Sales of Japanese pharmaceutical products and cars led to a 10% increase in exports to the US; European markets took a further 5.1% of Japanese products, but the Chinese marketplace saw a decline of 3.5%. According to OECD, China is the second most important market for Japanese goods, but the size of the import markets are all but identical $134, and $133 billion, respectively.
Many analysts are expecting the Bank of Japan (BOJ) to produce a further monetary stimulus to help the economy pick-up. The next session of the BOJ is planned for 30/10/15. The economy contracted in Q2 and some believe that a decline in industrial output may be enough to tip the economy back into a shallow recession. If the BOJ does act, it will probably trigger a fall in the value of the Yen which would help exporters in the longer term (if sustained).
Japan is currently running a trade deficit of $955 for the year to September – much of this deficit is due to the costs of producing electricity from fossil fuels as all but one of its 43 viable nuclear reactors is idle.