Japanese exports to China fall amid territorial dispute

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Media captionThe BBC's correspondent in Tokyo, Rupert Wingfield-Hayes, says exports are down for a fourth consecutive month

Japanese exports to China tumbled in September compared to the previous year, as a territorial dispute between the two countries weighed on the economy.

Exports from Japan declined at their sharpest pace since the aftermath of last year's earthquake and tsunami.

Overseas shipments fell 10.3%, compared to last year, the Finance Ministry said.

Relations between China and Japan have soured in recent weeks.

Islands dispute

Shipments to China fell 14.1% in September compared to the previous year. The month was marred by widespread protests in China against Japan over ownership of the islands known as Senkaku in Japan and Diaoyu in China.

Both countries, as well as Taiwan, lay claim to the territory.

In some cases the protests turned violent with people directing their anger at Japanese brands, such as the automotive giants Honda and Toyota.

Since then Japanese car manufacturers have said they will cut output to China.

Analysts said along with the bleak global picture, especially in Europe, this was one of the main factors that led to the drop in exports.

Image caption Japanese brands became the target of protests in China in September

"The worsening of exports reflected both the global slowdown and anti-Japan protests in China," said Naoki Iizuka, from Citigroup Global Markets in Tokyo.

"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."

The sectors most impacted were cars, electronics and general machinery.


The bleak trade picture comes after warnings about the overall strength of the Japanese economy.

Masaaki Shirakawa, the governor of the Bank of Japan, has warned that the financial system is at risk of shocks from Europe's debt crisis.

Slowing demand in key markets, as well as a strong yen, has weighed on manufacturing and exports.

That has led some economists to forecast that growth will stall for the rest of the year and that Japan may slip back into recession.

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