TOKYO (BLOOMBERG) - Japan's exports dropped for a tenth month in September as the global slowdown continues to batter manufacturers with overseas markets.

Shipments abroad fell 5.2 per cent to extend the longest declining streak since 2016, according to a report released by the Ministry of Finance on Monday (Oct 21). The median estimate of economists was for a 3.7 per cent decrease.

The data come ahead of a Bank of Japan review of the economy and inflation later this month that some analysts have seen as a signal of impending action from the central bank. A critical question for the BOJ is whether weakness in exports will spread to domestic demand and pull down inflation.

Any delay to a recovery in the global economy would come at a vulnerable time for Japan's economy with a sales tax hike implemented this month likely to weaken consumer spending and shrink economic growth in the last quarter.

While a truce in the US-China trade war could lower the risks faced by the global economy, it remains to be seen how both processes will evolve and what the effect will be on trade at home and abroad.

Economists are increasingly taking the view that the global IT cycle may have hit the bottom. That could provide a lift for Japan's exports going forward.

Looking ahead, a strong yen and slowing external demand - as highlighted by the IMF's cut in its global growth forecasts - will continue to weigh on Japan's exports, said Bloomberg economists.

Imports fell 1.5 per cent in September, versus economists' median estimate of a 2.8 per cent decrease.

Exports to China dropped 6.7 per cent while exports to U.S. slipped 7.9 per cent.

The trade balance was a 123 billion yen (S$1.55 billion) deficit, compared with a 54 billion yen surplus estimated by economists.