Japan exports tumble, gloom spreads
Manufacturers' sentiment in October hit the lowest since early 2010, separate data showed, reinforcing concerns that Japan may slide back into recession as sales to China and Europe sag and rebuilding from last year's earthquake and tsunami disaster loses momentum.
The weak figures pile pressure on the BOJ to stimulate the economy, and it will likely cut its economic forecasts and ponder further easing monetary policy at its October 30 meeting, according to sources familiar with its thinking.
The worsening of exports reflected both the global slowdown and anti-Japan protests in China. Exports will likely fall even further and the trade deficit will grow in October as the impact from the boycotting of Japanese products will play out more clearly in October, said Naoki Iizuka, an economist at Citigroup Global Markets Japan in Tokyo.
The slowdown in exports to China will likely hit sectors such as automobiles, electronics and general machinery harder in the coming months, and that could further dampen Japanese firms' capital spending, added Iizuka, noting that the BOJ was likely to ease policy further next week and cut its estimate of export performance.
Prime Minister Yoshihiko Noda told his cabinet last week to prepare a fresh stimulus package by next month, but the plan's limited scope and lack of detail failed
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