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Japan's June exports fall 6.7% for 7th straight decline
JAPAN'S exports fell for a seventh straight month in June, pressured by Sino-US trade frictions, slowing China growth and rising trade protectionism, as manufacturers' business confidence hit a three-year low.
Exports have been a drag on the world's third-largest economy, weighing on factory output and threatening to undermine capital expenditure.
Exports in June fell 6.7 per cent from a year earlier, Ministry of Finance data showed on Thursday, dragged down by declining sales of tankers, China-bound car parts and steel pipes. That compared with a 5.6 per cent decrease expected by economists and a 7.8 per cent fall in May.
Separately, the Reuters Tankan survey showed that Japanese manufacturers' business confidence hit a three-year low in July, highlighting the fragility of the export-led economy.
The batch of gloomy data underscored expectations among some analysts that the central bank will roll out more stimulus at its policy review later in the month.
Bank of Japan officials have said that they remain ready to ease further if economic conditions worsen, joining the US Federal Reserve in signalling additional monetary stimulus amid deteriorating global conditions.
"The export picture should remain bleak in coming months," Robert Subbaraman, chief economist and head of global markets research, Asia ex-Japan at Nomura, wrote in a report.
The economic strains showed no signs of abating as a lack of progress on US-China trade negotiations and heightened global uncertainty weighed on corporate spending.
US President Donald Trump and Chinese President Xi Jinping agreed last month to another truce in the year-long trade row between the world's two largest economies, but no deadline has been set for the negotiations to conclude.
Adding to global trade uncertainties, Japan is in a deepening row with South Korea after Tokyo curbed exports of some materials used to make high-tech equipment.
By region, Japan's exports to the United States rose 4.8 per cent in the year to June, up for the ninth straight month, driven by semiconductor-making equipment and cars, the trade data showed.
The increased US-bound shipments raise some concerns that Mr Trump could pile pressure on Japan to curb its car exports to the United States and open its highly-protected agriculture market to fix what he calls unfair trade imbalances.
Imports from the United States fell 2.5 per cent in the year to June, causing Japan's trade surplus with the world's biggest economy to increase 13.5 per cent from a year earlier to 669.9 billion yen (S$8.4 billion), the data showed.
Exports to China, Japan's biggest trading partner, tumbled 10.1 per cent year-on-year in June, down for fourth consecutive month.
Asia-bound shipments, which account for more than half of Japan's overall exports, declined 8.2 per cent in the year to June.
Japan's overall imports fell 5.2 per cent in the year to June, versus the median estimate for a 0.4 per cent decline, bringing the trade balance to a surplus of 589.5 billion yen, versus the median estimate for a 420 billion yen surplus. REUTERS