Demand for Japanese exports is tanking

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After recording a surprise trade surplus in October, Japan’s trade balance went into reverse in November, recording a deficit of 379.7 billion yen.

Although smaller than the 446.2 billion deficit predicted, the figure was largely due to exports and imports declining at a faster pace than expected.

From a year earlier exports fell by 3.3%, below the 2.1% contraction of October and expectations for a decline of 1.5%. It was the steepest annual decline recorded since December 2012.

Exports to the US rose by 2.0%, down from 6.3% growth seen in the year to October. Exports to Asia, largely as a result of a 8.1% decline to China, fell by 8.7%, far greater than the 3.6% decline seen previously.

On the other side of the ledger, imports fell by 10.2% – smaller than the 13.3% drop of October, but below expectations for a contraction of 8.3%.

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