Japan's exports fell 3.7 percent in October from a year earlier, marking the first decline in three months, the Ministry of Finance said in a preliminary report on Monday.
The drop in exports compared to a median market forecast for a 0.3 percent decline and comes on the back of a 2.3 percent increase booked in September, the ministry's data showed.
According to the official government statistics, the value of exports totaled 5,512.8 billion yen (71.68 billion U.S. dollars) in the recording period, while that of imports rose 17.9 percent in October from a year earlier to 5,786.6 billion yen.
The trade deficit stood at 273.8 billion yen in the balance of goods trade, the ministry's data showed, compared with a median market forecast of a 39.9 billion yen surplus and marking the first trade deficit in two months.
Japan's key export sector has been adversely affected by a persistently strong yen as in times of economic uncertainty investors view the Japanese currency as a safe haven, while short- term speculators look to the yen to secure quick gains, driving up the currency in money markets versus its major counterparts.
In addition, debt contagion in the eurozone has seen the euro drop against the yen, against a backdrop of global economic malaise, and Japanese exporters see their overseas profits eroded when repatriated when the yen is strong and battle to remain competitive on a global stage.
Manufacturers here reliant on shipping goods overseas have begun an exodus to developing economies where parts and labor costs are more economical, which is also adding downward pressure to Japan's key export sector and economy.
Japanese Prime Minister Yoshihiko Noda and Finance Minister Jun Azumi have both described this phenomena as a "hollowing out" of Japan's economy.
Recent flooding in Thailand has also been to the detriment of Japanese exporters, as global supply chains have been hit by parts shortages following the shuttering of factories in Thailand and the subsequent fall in production thereafter.
The Ministry of Finance on Monday also noted that Japan's exports to Asia, which comprise more than half of the nation's total exports, dropped 6.6 percent in the recording period and exports to the United States fell 2.3 percent in October from a year earlier.