Japanese exports to the EU fell 20.1 percent in October from a year earlier, while those to the US went up 3.1 percent year-on-year.

The country's exports decelerated for a fifth month in October, down 6.5 percent from a year earlier with a trade deficit of 548.97 billion yen, the Finance Ministry said. And the first 10 months, saw Japanese shipments reach 53.5 trillion yen, down 2.3 percent from a year earlier with a record trade deficit of 5.3 trillion yen.

"Japan's economic growth depends quite heavily on external demand. The country's lowering export competitiveness and robust imports of energy products will leave Japan with a trade deficit for a while and drag the country's economy into recession," Jin said.

He added that the decline in Japan's exports to China will extend to the last quarter of this year and even to the first half of 2013 as the boycott of Japanese products showed no signs of letting up.

"Japan is going to hold an election in December and the new government may start to ease the diplomatic tension in February or March," said Jin.

"It will be very good news if Asia's two biggest economies reach an agreement in the first half of 2013 when the boycott of Japanese products fades out."

Amid the boycott, Japanese automakers suffered the most, with Japanese motor-vehicle exports to China slumping 82 percent year-on-year in October, the largest monthly drop since October 2001, according to Japan's Ministry of Finance.

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