According to Fox Capital Partners, Japanese exports fell for the first time in more than a year adding to worries about the challenges facing the world’s third largest economy. Despite highly accommodative monetary policy from the country’s central bank, Japan is once again in recession and seemingly unable to achieve the inflation Shinzo Abe, the country’s Prime Minister, has been so desperate to create.

According to the Ministry of Finance, exports in October slid 2.1% from a year earlier while imports dropped by 13.4%. While the fall in exports was predicted by analysts, the drop in imports was much sharper than the 8.6% that had been expected.

“Up until now, the export sector had held up quite well compared to other aspects of the economy but the protracted slowdown in Japan’s key export markets appear to have manifested themselves in this round of data,” said Gordon Li-Chao, Fox Capital Partners’ chief economist.

“The slowdown in China’s economy - which accounted for 18% of the Japan’s exports in October – had a sizeable hand in the decline in exports which fell 3.6% during the month,” he explained.

The figures prompted calls for additional monetary stimulus from the Bank of Japan which has demonstrated a newfound reluctance to unleash more quantitative easing in recent months.

“The Bank’s Governor, Haruhiko Kuroda, may be wondering if all the monetary largesse is having as much of an effect on the economy as it does on risk assets,” Li-Chao added.

“Fox Capital Partners has advised clients to acquire Japanese blue chips on dips reasoning that additional stimulus from the Bank of Japan is almost certainly on the way and I still believe that it very much the case,” he concluded.

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