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Japan's imports grew more than 40% for a fifth straight month in September to hit the largest value on record as a slump in the yen aggravated already high fuel import costs, stoking fears of cost-push inflation.

The surge in imports overwhelmed growth in exports, resulting in a 2 trillion yen ($13.3 billion) trade deficit and extending the run of shortfalls to 14 months, adding to downward pressure on the Japanese currency.

For the fiscal first half to end-September, Japan's trade deficit jumped to a record 11 trillion yen, the Ministry of Finance (MOF) data showed, driven by surging fuel bills and a 20% decline in the yen against the dollar over the period.

Persistent deficits worsen Japan's terms of trade, causing a shift of domestic income overseas and undermining Japanese purchasing power.

Once welcomed for making exports more competitive, the yen's weakness is now seen hurting households and retailers by inflating already high prices of imported fuel and food. The currency's sharp falls also heighten uncertainty for firms making business decisions.

"Surging imports are by no means a reflection of strength in domestic demand. Instead, higher living costs will prompt households to tighten their belts," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"The weak yen may be inflating export value, but external demand is slowing down. I would not be surprised if Japan would follow Europe and the United States in sliding into recession next year when the global tightening cycle runs its course."

The MOF data showed Japan's imports rose 45.9% year-on-year in September, led by crude oil, liquefied natural gas and coal, roughly matching economists' median estimate.

It was the 20th straight month of gains and took imports to 11 trillion yen, the largest value on record, according to MOF data going back to 1979. Imports rose 49.9% in the previous month.

Exports rose 28.9% in September from the same month a year ago, driven by U.S.-bound shipments of cars and demand for chip and electronics parts from South Korea. The rise compared with a 27.1% increase expected by economists, taking the value of exports to the largest on record.

By region, exports to China, Japan's largest trading partner, grew 17.1% year-on-year in September, led by demand for cars and chip-making equipment.

U.S.-bound shipments advanced 45.2% in the year to September, led by shipments of cars, construction and mining machinery.

Japan's economy expanded at an annualised 3.5% in April-June, posting a third straight quarter of growth, as the lifting of COVID-19 curbs boosted consumer and business spending.

Japanese authorities spent 2.8 trillion yen last month intervening to sell the dollar and buy the yen for the first time since 1998 to support the Japanese currency. (Reuters)

The U.S. government is considering a plan to jointly produce weapons with Taiwan, a business lobby said on Wednesday, an initiative intended to speed up arms transfers to bolster Taipei's deterrence against China.

U.S. presidents have approved more than $20 billion in weapons sales to Taiwan since 2017 as China has ramped up military pressure on the democratically-governed island Beijing claims as its own territory.

But Taiwan and the U.S. Congress have warned of delivery delays because of supply chain difficulties and backlogs caused by increased demand for some systems due to the war in Ukraine.

"It's right at the beginning of the process," Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council, which counts numerous U.S. defense contractors as members, said of the plan.

Hammond-Chambers said it was yet to be determined which weapons would be considered as part of the effort, though it would likely focus on providing Taiwan with more munitions and long-established missile technology.

But he cautioned that any such move would require weapons makers to obtain co-production licenses from the State and Defense departments. Hammond-Chambers added there could be resistance within the U.S. government to issuing co-production licenses due to uneasiness about approving critical technology for a foreign platform.

"It's a piece of the puzzle, not a game changer," Hammond-Chambers told Reuters after Japan's Nikkei newspaper first reported on the plan, citing three unidentified sources.

Taiwan's Foreign Ministry declined to comment, but reiterated that Taiwan-U.S. relations were both "close and friendly".

Possibilities would include the United States providing technology to produce weapons in Taiwan, or producing the weapons in the United States using Taiwanese parts, the Nikkei report added.

Asked about the effort, a U.S. State Department spokesperson said: "The United States is looking at all options to ensure the rapid transfer of defensive capabilities to Taiwan."

"The United States' swift provision of Taiwan defensive weaponry and sustainment via Foreign Military Sale and Direct Commercial Sale is essential for Taiwan's security and we will continue to work with industry to support that goal," the spokesperson said.

News of the plan came after U.S. Secretary of State Antony Blinken told a forum at Stanford University on Monday that "Beijing was determined to pursue reunification (with Taiwan) on a much faster timeline," though he did not specify a date.

China's leader Xi Jinping said on Sunday that China would never renounce the right to use force over Taiwan, but that it would strive for a peaceful resolution.

Taiwan's presidential office said this week Taiwan would not back down on its sovereignty and would not compromise on freedom and democracy, but that meeting on the battlefield was not an option.

U.S. officials have been pushing Taiwan to modernize its military so it can become a "porcupine," hard for China to attack.

U.S. officials have criticized Beijing for using a visit by U.S. House Speaker Nancy Pelosi to Taiwan in August as a pretext to change the status quo across the Taiwan Strait by ramping up nearby military drills. (Reuters)

Chinese President Xi Jinping would become a "sinner" of all Chinese people if he attacked Taiwan and would not win a war as he would face international sanctions and diplomatic isolation, Taiwan's top security official said on Thursday.

China has ramped up military and political pressure against democratically governed Taiwan over the past two years as it seeks to assert its sovereignty claims, which the government in Taipei strongly rejects.

Opening a twice-a-decade congress of China's ruling Communist Party on Sunday, Xi said it was up to the Chinese people to resolve the Taiwan issue and that China would never renounce the right to use force but still strive for a peaceful resolution.

Speaking to reporters on the sidelines of parliament, Chen Ming-tong, head of Taiwan's National Security Bureau said Xi would face disaster if he followed through on his threats of ever attacking Taiwan.

"There is no possibility of winning in using force to attack Taiwan," Chen said.

China would face international sanctions and diplomatic isolation for doing so, he added.

"Xi would forfeit the so-called great rejuvenation of the Chinese people, and become a sinner of the Chinese people," Chen said, using a term that refers to those who are ethnically Chinese rather than of Chinese nationality.

Taiwan's government says only the island's 23 million people can decide their future, and that as Taiwan has never been ruled by the People's Republic of China its sovereignty claims are void.

"It's very clear that the two sides should respect each other and develop separately, which is the way that will bring happiness to the people," Chen said.

Taiwan President Tsai Ing-wen has repeatedly offered to resume talks with China based on the principles of equality and mutual respect, but Beijing has rebuffed those advances insisting she must first acknowledge that Taiwan is part of China.

Tsai is overseeing a military modernisation programme to respond to China's growing threat, which in August included war games carried out near the island as Beijing angrily responded to a visit to Taipei by U.S. House Speaker Nancy Pelosi. (Reuters)

A Russian aircraft released a missile near a British aircraft patrolling in international airspace over the Black Sea on Sept. 29, defence minister Ben Wallace said on Thursday.

Wallace told parliament Britain had suspended patrols following the incident and expressed their concerns to Russia's Defence Minister Sergei Shoigu. Russia said it was a technical malfunction and Wallace said Britain has now resumed patrols.

The patrols now have fighter aircraft escorts, he added. (Reuters)