Japan export growth cools amid worries about China slowdown

JAPANESE exports rose in June for a seventh straight month, but the pace of growth slowed sharply from the previous month, data showed on Thursday (Jul 18), underscoring concerns that a slowdown in China may hamper Japan’s trade-reliant economy.

Slowing exports could dash policymakers’ hopes that solid external demand may more than offset weak domestic consumption. Japan’s economy has been expected to emerge from a sharper-than expected contraction in the first quarter.

Data from the Ministry of Finance showed Japanese exports rose 5.4 per cent year-on-year in June, smaller than a 6.4 per cent increase expected by economists in a Reuters poll and cooling from 13.5 per cent growth in May.

Imports grew 3.2 per cent in June from a year earlier, versus a 9.3 per cent increase expected by economists, swinging the trade balance into a surplus of 224 billion yen (S$1.9 billion). Estimates were for a deficit of 240 billion yen.

Imports had risen 9.5 per cent in May.

Export volumes fell 6.2 per cent in June, the data showed.

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By destination, exports to China by value rose 7.2 per cent year-on-year in June, led by demand for chip-making equipment, the trade data showed, but growth slowed from the 17.8 per cent increase in May.

Shipments to the US, Japan’s ally and a key market, grew 11 per cent year-on-year in June, while those to European Union fell 13.4 per cent. REUTERS