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Posted : 2013-03-31 18:26
Updated : 2013-03-31 18:26

Exports to Japan fall on weak yen

By Yi Whan-woo

The country's exports to Japan plunged by 17.4 percent to $2.89 billion in February from a year earlier in the wake of the continuing depreciation of the Japanese yen, data showed Sunday.

The drop indicates that the effects of the weakening yen are steadily being felt in Asia's fourth-largest economy.

The Korea International Trade Association (KITA) said exports to the neighboring country began to drop in the second half of last year, especially after Japanese Prime Minister Shinzo Abe took office in December and kick-started aggressive monetary easing.

It was the fourth month in the past two years that the value of shipments to Japan fell below $3 billion.

Shipments to Tokyo dropped 12.1 percent year-on-year in July 2012, 7.2 percent in August and 13.1 percent in September. The rate sank by 18.1 percent in December 2012.

On the other hand, Japan's exports to Korea have increased since last October. Inbound shipments grew 4.4 percent in January and 0.9 percent in November.

Korea posted a trade deficit of $2.08 billion with Japan in February.

An economist warned that the country should come up with measures to cope with the weakening yen.

"The deficit with Japan could worsen if the yen's depreciation against the dollar deepens in the long term," said Lee Ji-pyeong, a senior researcher at LG Economic Research Institute.

The yen dropped 21 percent against the greenback to 94.04 yen per dollar on March 29, from 77.49 in 2012.

Korea's auto industry is one of the sectors hit hardest by the weakened yen with exports to overseas markets dropping by 5 percent year-on-year between January and February.

The shares of Korea's Hyundai Motor in the U.S. market only gained 2 percent during the cited period, while that of the firm's affiliate Kia Motors dropped 3 percent during the same period.

The U.S. market shares of Japan's leading car manufacturers ― Toyota Motor Corp. and Honda Motors Co. ― increased by 14 percent and 4 percent, respectively.

The local tourism industry also suffered from the weakened yen with the number of Japanese tourists dropping 26.2 percent year-on-year to 171,950 in February.


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