South Korean exports to Japan tumble on weak yen

Category: International Trade Sub-category: Foreign Trade by Country
Document type: news

South Korean ExportsSouth Korea's exports to Japan have slowed sharply since the second half of 2012 due to a weak yen stemming from Tokyo's aggressive monetary easing. South Korean shipments to the neighboring country plunged 17.4 percent from 2012 to U.S. $ 2.89 billion in February'13, according to the data by financial industry sources and the Korea International Trade Association. February marks the fourth month in the past two years that the value of South Korea's monthly exports to Japan have hovered below the $ 3 billion mark. South Korean exports to Japan began to lose steam in April 2012, with the pace of their decline picking up following the inauguration of conservative Japanese Prime Minister Shinzo Abe in the second half of last year. Seoul's shipments to Tokyo tumbled 23 percent year-on-year in April last year before rising 1.1 percent, but they again dropped 12.1 percent in July, 7.2 percent in August and 13.1 percent in September In December last year.

South Korean exports to Japan sank 18.1 percent from a year earlier, in contrast, Japan's exports to South Korea shifted to an upturn from November last year, according to the data. Japan's shipments of its goods to South Korea had been shrinking until October last year, but they rose 0.6 percent year-on-year in October, 0.9 percent in November and 4.4 percent in January. In February, South Korea posted a trade deficit of $ 2.08 billion with Japan. Experts said the yen's continued depreciation against the U.S. dollar will likely deal a harsher blow to South Korea exports down the road. "South Korea's trade deficit with Japan could worsen if the yen's depreciation against the greenback deepens for a long period of time, "said Lee Ji-pyeong, a senior researcher at LG Economic Research Institute.