The Korea Financial Investment Industry and Trade Association said on the 22nd that South Korea's exports to Japan had declined sharply for seven consecutive months from February to August this year. The proportion of South Korea's exports to Japan in South Korea's total domestic exports also declined significantly.

In January this year, South Korea's exports to Japan accounted for 7.70% of its total domestic exports. With the weakening of the yen, its exports to Japan decreased, and its share in total exports fell below 6%. It was lower than 6% for three consecutive months from March to May, and 5.94% in August.

According to analysis, this phenomenon is the result of Japan's implementation of quantitative easing policy, which has aggravated the depreciation of the yen. Compared with the Japanese yen, the Korean won has remained strong. Recently, the exchange rate of the Korean won against the US dollar is 1060 Korean won. Compared with the US dollar, the value of the Korean won rose by 6.3% in the third quarter of this year, ranking the second in the G20.

"Abenomics" once had side effects, leading to the insignificant effect of yen depreciation, but recently Japan's exports have recovered again. In May this year, Japan's exports increased by 10.1% year on year, 7.4% in June, 12.2% in July and 14.6% in August. At the same time, affected by the weak yen, South Korea's chemical, steel and other industries were hit hard, and its export projects IT and auto exports, which compete with Japan in the world market, suffered negative impacts.

According to the analysis of HI Investment Securities, the competitiveness of Korean products has declined in terms of relative prices, so the depreciation of the yen is naturally a negative factor. Even if the depreciation trend of the yen has eased, the exchange rate of the Korean won against the yen is different from that of the past, so it will inevitably be affected. However, with the recovery of Japanese economy and the increase of consumption tax in April next year, Japanese consumption may rise, which is expected to offset the negative impact of the weak yen.