TOKYO: Japan’s exports last month declined by the most since February 2021, sapping momentum from the nation’s economic recovery as global demand weakened.
Exports declined 1.7 percent from a year earlier led by automobiles, mineral fuels and construction machinery, and slipping to negative growth for the first time since November last year, the Japanese Ministry of Finance reported yesterday.
The reading missed economists’ forecast of a 0.9 percent gain.
Imports rose 2.1 percent, led by electronic calculators and semiconductor parts, and slightly missed the consensus estimate of a 2.8 percent gain, while the trade deficit narrowed to ￥294.3 billion (US$1.97 billion).
The results indicate that Japan’s economy likely received limited support from external demand in the third quarter amid a global slowdown.
“It’s a weak result,” Mizuho Research & Technologies Ltd senior economist Yayoi Sakanaka said, adding that net exports would likely be a drag on the third quarter.
“Looking ahead, though the yen is slightly weaker again, I don’t think it will be a tailwind for exporters” given that other stronger factors are at play, such as China’s strengthening of its own exports which would likely muscle out Japanese shipments, Sakanaka said.
The weaker exports reflect sluggish global growth amid growing uncertainty about the outlook in major economies.
Shipments to China sank 7.3 percent last month, reversing gains of 5.2 percent the month before, while those to the US and Europe fell 2.4 percent and 9 percent respectively, the ministry’s data showed.
The central bank is closely monitoring global trends, Bank of Japan (BOJ) Deputy Governor Ryozo Himino said last week.
“While a weak overseas economy is one hurdle for the BOJ to raise interest rates, I believe the bank is more focused on domestic prices and exchange rate levels,” Sakanaka said.
Japan’s currency remains another source of uncertainty, with the yen approaching the ￥150 level to the US dollar.–BLOOMBERG
