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Korea-Japan trade drops 14% in Q1 y/y Updated: 2015-04-22 04:01:15 KST

According to data released by the Korea Trade Association on Tuesday,business between the two countries dropped roughly 14-percent in the first quarter compared to the same period last year,totaling a little over 18.4 billion U.S.dollars.
That decrease is hurting Korean exporters.

"Korean products have lost price competitiveness due to the weak yen, drastically decreasing exports. Secondly, Korea's sluggish economy forced a reduction in key Japanese imports. Korea has also been diversifying its export market to China, which in turn took a toll on Korea-Japan trade overall."

Here's how that played out over the first quarter.
Exports plunged 22-percent, with petroleum products taking a particularly big hit, dropping nearly 55-percent due to the slump in global oil prices.
Meanwhile, imports shrunk almost 9-percent, with Japanese pig and scrap iron plunging roughly 47-percent.
Korean firms are now looking for ways to rejuvenate trade.

"From an import perspective, Korean firms need to take advantage of the weakening yen and invest more in Japanese plants and equipment. For exports, Korea needs to increase technical cooperation to obtain the source technology in order to enhance product quality and competitiveness."

Trade between the two countries reached an all-time high of 108 billion dollars back in 2011.
Since then, it's been on a steady decline.
Experts say that if the yen continues to drop, the decline in trade could get worse.
Kim Hyun-bin Arirang News.
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