This is attributable to a degree to the drop in exports to China, reflecting in part the recent developments in the relations between Japan and China, but it is largely attributable to the sluggish exports of capital goods and parts, which are a major category of Japan’s exports along with automobiles.
In this regard, the sluggishness in exports of capital goods and parts is strongly affected by the fact that sentiment in the manufacturing sector has deteriorated worldwide amid the current phase of global economic deceleration, causing firms to take a cautious stance toward business fixed investment.