The complex issue of trade

Japan has seen a fall of over 10% in exports in September compared to a year ago. This is pretty exceptional under any circumstances and threatens the Japanese economy.

The causes are varied and add up to an overall drop. They are:
A boycott of Japanese goods in China
The weakening of European markets
The strong Yen

The unfortunate combination of factors means that japan will see Aggregate Demand falling as net exports (X - M) is a significant influence on the Japanese economy. Japan has run a trade surplus for many years and this has helped raise the rate of growth in Japan. Now a return to recession is a real possibility.

Interdependence of modern economies is a fact of life.

The BBC report the story here