Japan Exports Fall by Nearly Half in February

Note the dramatic fall in Japanese exports in February was relative to the year-ago level, but that does not make the outcome any less ugly. From Bloomberg:

Overseas shipments fell 49.4 percent from a year earlier, the sharpest decline since at least 1980, when the government started to keep comparable data, the Finance Ministry said today in Tokyo. Economists predicted a 47.6 percent drop.

Shipments to the U.S. tumbled an unprecedented 58.4 percent. Economists say the collapse signals gross domestic product will shrink this quarter at a similar pace to the annualized 12.1 percent contraction posted in the previous three months, the sharpest since 1974….

“There’s a still of lot of weakness out there; that’s going to be a big drag on production and most people are looking for the first-quarter GDP to be as bad as the previous quarter,” said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. “Japan is as dependent on exports as anybody.”

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  1. Anonymous


    Thank you for naked capitalism. You are making a difference in my world and others.

    I was critized about my comment on another posting about hyperventilating about wanting to do something other than spout textual white noise about the situation facing us. Since then I have found that others are indeed trying to put something together.

    See here: http://anewwayforward.org/demonstrations/

    I will do what I can here in Portland and encourage others to get off their keyboards and be seen in public.

    I apologize (if you are offended) for using your blog to publicize such patriotic activities.


  2. bg

    I got a report from a relative in the DRAM semiconductor industry in Taiwan, that unpaid furlows are being reversed as they have been getting orders. I have no idea how much of this is pent up demand after the first crisis, and how much is real stabilization. However good news is rare enough to deserve to be reported.

  3. Yves Smith


    I haven’t had a problem with your comments. An anon in another post went on repeatedly in a manner that was emotional, non-specific, and accusatory. That does not go over so well.

  4. brushes9

    I have read in the comments that analysis, even by putting unemployed financiers back to work, should be done to figure out what these CDO’s are worth.

    It maybe obvious to many commentators here but, since I haven’t seen it spelled out, I’ll state why this is not possible.

    These CDO’s, comprised of 500 to 1000’s of individual loans would require at-home visits and at-businesses visits to determine and predict if, or if not, the loans will be repaid.

    Can you imagine how those interviews would go with couples in their living rooms and people in their offices? Ridiculous.

    We are left with CDO’s that will “behave,” but are impenetrable. Their designers “not foreseeing this possible outcome” proves that they were intelligently constructing dangerous instruments, given that it is inconceivable that they could not foresee their impenetrability.

  5. Anonymous

    Japan Day on NC today…

    There was a lot of discussion between Ed and the readers today about the potential economics & outcome of Geithner's Japan-like plan — the best response was from a reader who noted that the US lacks 90's Japan's semi-monopoly of a market (hi-tech), savings, and a world willing to buy.

    How do you think the US' position compares to Argentina?

    (A few days ago I posted an except from an Argentinean's account of the harrier aspects of life after economic collapse– one inadvertently referred by you. We hear a lot about Japan for obvious reasons, and how the economics of certain plans might operate, but not really how those economics will shape the lives of different classes of people or how past crises functioned similar to how ours might. I realize this wades into the murky baiting waters of populism, but I'd like to see some expansion of this discussion.)

  6. Anonymous

    (11:54 commenter continuing)

    Could we get a post, or guest post, that illustrates how the inherent access of Geithner & Obama's positions (potentially) give them more insight into the state of the economy — i.e., what information they are privy to, etc.

    Also, a guest post from someone with a lot of regulation/oversight experience — their take of its flaws, potential, "if I were in charge" thoughts on how to shape stellar oversight bodies and regulations.

  7. Anonymous

    I’ll second the Anon at 11:54’s call for an ‘impact assessment’ of this financial crisis, and Geithner’s plan, on the various classes of people in our American society. Having some knowledge might help us readers prepare for the worst.

  8. Anonymous

    Nevermind that plenty of formerly composed and responsible owners, now racked with anxiety stemming for other economic woes, might be incorrectly perceived as never-should-have-had-it dead beat borrowers.

    I don’t know enough about real estate understand how any plans might pan out, but I wonder if it’d be smart to break the CDOs into smaller classifications, either regionally or by security, whatever. This is something for the CDO owners to mull over, but it might not hurt for the blogging community or the govt to start outlining some options for handling these things.

    Since some of the biggest junk was issued by regional subprime operations, which were then lumped with other mortgages form elsewhere, it may be that the CDOs can be broken down into “South Cleveland’s crappy loans”, etc. Then local govt can assist homeowners with NACA to renegotiate their loans, secure employment, etc. That way these hedge funds or whoever buys and managers the CDOs doesn’t have to send some poor schmuck into the living rooms or desperate people to make subjective assessments of their situation.

    One idea that did cross my mind was using the “street view” option of Google Maps to give outside investors the ability to assess neighborhoods and houses from afar. I got the idea after hearing an NPR story about a handful of independent former Wall St investors driving to New Jersey to buy up foreclosed/defaulting mortgages. They said they were just weren’t many resources for them, and not enough of them period to wander the country scoping out homes. This Google idea would go a long way in getting upper east coast investors to look into buying property in Colorado, South Dakota, west Florida, etc.

    This sort of planning is something both parties can get behind. There is no public discussion being conducted on how to expedite the CDO stuff, just “give them the money and let the market work its magic.” The first round of TARP proved that lenders are comfortable sitting on assets, while other segments of the economy (and the neighborhoods and families they represent) wither. It’ll be a real shame if all this money moves, while the only thing that changes for people, is the title on their (or their former neighbors) mortgage. The new CDO buyers should take a trip to Cincinnati, Detroit, South Philly, and places like Trenton to see how far neglect and some attention goes in deciding whether property and communities tank or recover.

  9. Anonymous

    Anon @ 12;24,

    Yeah. Its easy to say “and then we’ll be in inflation hell,” and even normal to not want to invite self-fulfilling prophecy, but not expanding on the inevitable outcomes kind of begins to reek of the willful ignorance of the well-off who prefer not to ponder.. you get it.

  10. Anonymous

    Anon @ 12;24,

    Yeah. Its easy to say “and then we’ll be in inflation hell,” and even normal to not want to invite self-fulfilling prophecy, but not expanding on the inevitable outcomes kind of begins to reek of the willful ignorance of the well-off who prefer not to ponder.. you get it.

  11. Justin


    I do think Taiwan is doing better relatively than Japan. However, I don’t think that means Japan is doing well. I recently spoke with someone reasonably high up in the asian ratings industry, and he definitely used the word “depression” in the conversation regarding Japan.

    He contrasted the 90s in Japan which was concentrated mostly in the financial sector, where this is leaving a tornadic wake of destruction in the manufacturing sector.

    Someone with more knowledge can perhaps chime in regarding credit markets in Japan, as I was under the impression that while banks struggled mightily there in the 90s, manufacturing was less reliant on them than US manufacturing is today on US credit markets, and did well enough to hoist them out of the debt trap hole they were in.

  12. Anonymous

    I’ve heard the same comment, re: end of unpaid furlough in Taiwanese semi companies.

    I would caution reading too much into it, however… there was also a momentary blip in early Feb in various commodity prices due to the Chinese stimulus package, leading many to speculate the Chinese economy was about to accelerate. In reality, it was just folks replenishing inventory in expectation of further growth… which so far at least, hasn’t materialized.

  13. Timo

    Turning this around: US imports have collapsed from 15 percent GDP maybe somewhere around 12 percent (annualized). (Exports from China probably are as bad or worse?)

    If all other sectors in the US economy are contracting as fast:
    100 divided by 15 = 6,67. 6,67 times three = 20 PERCENT collapse in the US GDP!

    Of course this is just a rough extrapolation but ACROSS THE FIELD skyrocketing unemployment numbers seem to be supporting this estimate.

  14. Timo

    My theory is that production must equal consumption in an economy no matter what (in the long term anyway).

    So if the consumption is bigger than production, it adds an multiplier during downturns compared to 50-50 economy, meaning making it much more severe.

    So if Japan economy contracts 12.1 this year with roughly ideal 50-50 economy, US economy with 70-30 combo will contract even more (70/50 = 1,4 multiplier): 1,4 * 12,1 = about 17 percent.

    Of course this could be just me playing with numbers :)

  15. Anonymous

    Whilst Japan’s export manufacturing is grouped around discretionary retail items (cars and electronics) this is not really a surprise. Japan will need to come up with a plan on how to diversify its export strategy, something that perhaps they will find very difficult.

    We should also consider the other side of the coin with imports dropping 43 percent as well. Although a part of this is due to crude oil and we have already seen the impacts of component manufacture in the likes of Taiwan, nobody is tracing this back further. Australian and Brazilian raw materials must be taking a hit, but there are also many small manufacturers in the US who export components out to Japan.

    Just as the arguments about whether the world economy could carry on unaffected by a US downturn proved false so will the misguided idea that the US economy will not be affected by an Asian, Chinese and Japanese downturn. I expect US beef prices to take a tumble and a number of farms to get into trouble, I expect battery manufacturers to struggle and Dow Chemicals have very good reasons for their reorganisation of their automobile section of the company.
    Perhaps the most important thing to take from the economic situation in Japan is that all the bailouts in the world only delay the inevitable.

  16. fundana

    I’ve been travelling to Japan since 2003 and have lived here full-time since 2005.

    Living in the Tokyo Metropolitan area (the most densely populated urban area in the world) you would hardly know anything has changed. Everywhere you go there is a swarm of people.

    However a couple of months ago I started noticing real change. There are a couple of restaurants near to where I live that I go back to at least once a month.

    One is a very good Thai restaurant, usually on a Saturday night, if I don’t show before 7, I’ll have to wait for a table. I went back a couple of weeks ago, it was after 7 so I thought I would have to wait. To my surprise, I got straight in, not only that in a 40 table restaurant about 36 were empty. A chat with the owner revealed it had been like that for a couple of months. “Very Bad” she said.

    Likewise, a great Indian restaurant I go to for lunch, last week I walked in at 12:45 (peak hour for that place) hoping to get a seat. There was one couple getting up from their table to leave, the rest of the place was bare.The owner asked me point blank “what is going on?”

    I live near the biggest shopping center in Japan (at least it was a couple of years ago) it is still very popular, plenty of people on weekends and lines to get into restaurants. It was so popular in fact, another mall, (much smaller) opened over the road a couple of years back to get some of the spillover. Popped my head in there the other day, it is literally a ghost town, half the shops are closed, absolutely no foot traffic, it really is shocking when outside there are swarms of people, just noone going inside.

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