Japanese economy may have two consecutive quarters of contraction, which is the definition of "recession".
DPJ's Seiji Maehara, whose ministerial portfolio includes economy, finance, nuclear policy, and national strategy (virtually eliminating the need for the cabinet), pushes Bank of Japan for more monetary stimulus. He is silent on 20-plus years of fiscal stimulus by the Japanese government that has gone nowhere.
The most decline came from exports to the EU, dropping 21.1 percent, followed by exports to China that dropped 14.1%, according to Bloomberg. (I guess they don't round the numbers in 2 digits.)
Imports increased more than anticipated, because "“Everyone rushed to pass customs,” before a tax increase on oil imports that began Oct. 1."
Tax increase on oil imports, when the economy is struggling??? What are they thinking? Oh I see, they are worried about "global warming". Of course. So the tax on 1 kiloliter of crude oil went up more than 10% starting October 1, according to the information from the National Tax Agency.
From Bloomberg News (10/21/2012):
Japan Exports Tumble 10% as Maehara Presses BOJ to Ease: Economy
Japan’s exports fell the most since the aftermath of last year’s earthquake as a global slowdown, the yen’s strength and a dispute with China increase the odds of a contraction in the world’s third-largest economy.
Shipments slid 10.3 percent in September from a year earlier, leaving a trade deficit of 558.6 billion yen ($7 billion), the Finance Ministry said in Tokyo today. The median forecast in a Bloomberg News survey of analysts was for a 9.9 percent export decline. Imports rose 4.1 percent.
Economy Minister Seiji Maehara pressed the Bank of Japan for more action yesterday, saying the nation is “falling behind” in monetary stimulus and is at risk of another credit- rating downgrade. The BOJ today cut its view of eight out of nine regional economies while Taiwanese unemployment rose to a one-year high, underscoring weakness across Asia after China’s third-quarter growth was the slowest since 2009.
“There’s a high chance that Japan’s economy will have two consecutive quarters of contraction through December,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “The slump in advanced nations is spreading to emerging economies.”
...The decline in shipments, exacerbated by a spat with China over islands in the East China Sea, was the biggest since May last year, when the country was rebuilding supply chains wrecked in the March earthquake and tsunami.
Shipments to China, the nation’s largest export market, slid 14.1 percent from a year earlier. Exports to the European Union fell 21.1 percent, while those to the U.S. rose 0.9 percent. Auto shipments to all markets dropped 14.6 percent.
...The trade deficit was the first in the month of September since 1979 and compared with economists’ median estimate for a 547.9 billion yen shortfall. The rise in imports was higher than a 2.9 percent gain estimated by economists as the country bought more oil and liquefied natural gas.
“The reason behind the increase is very simple,” said Shohei Setoh, a Tokyo-based manager for a crude oil trading group at JX Nippon Oil & Energy Corp. “Everyone rushed to pass customs,” before a tax increase on oil imports that began Oct. 1.
(Full article at the link)