ECONOMIC JAPAN

Evening Post, Volume CXXVI, Issue 50, 27 August 1938, Page 9

ECONOMIC JAPAN

SLUMP IN EXPORT TRADE

FACTOR OF BOYCOTT

United Press Association—By Electric Telegraph—Copyright. (Received August 27, 11 a.m.) LONDON, August 26. Reports now reaching the City show that Japanese finances are subject to an almost unbearable strain. The official trade figures show a decline in exports of 21.5 per cent, for the past six months. But they do not tell the whole story, as they include exports to the yen bloc countries. - "The Statist" estimates that the genuine foreign exports have slumped by at least 38.9 per cent, and that the import surplus, for which Japan has had actually to pay from its small foreign exchange and gold reserves, is fully twice as large as the trade returns would suggest. It also appears, in contrast with official statistics, that Japan has lost from 50 to 60 per cent, of its gold reserves since the war in China began. The general belief is that a sharp deterioration in Japan's economic position is likely in the near future. The "Oriental Economist," for June, published in Tokio, showed that foreign trade had contracted. In terms of yen (one yen being worth about Is s£d in New Zealand currency), the trade position for the first five months of this year showed a reduction of 626,000,000 yen in imports and 239,000,000 yen in exports on corresponding figures for 1937. It is remarked by the "Oriental Economist" that that reduction of imports has been part of the Government's conscious policy, but the reduction in exports has been due to "a combination of adverse factors consisting of business depression and a commodity price slump abroad as contrasted to higher prices in Japan, and boycott movements against" Japanese products in foreign markets. "Business activity on a world basis is far from being on the road _to recovery, and Japanese prices, despite the recommendation by the Price Commission, cannot be expected to adjust themselves quickly, to adjust themselves downward. Taking advantage of this situation, the boycott movement ■ abroad against Japanese manufactures may continue unabated, and prospects for an improved export movement must remain uncertain."