Japan exports underwhelm in June, global weakness drags on economy
JAPAN’S annual exports grew much-less than expected in June, highlighting weak global demand that continues to undercut the post-Covid recovery in the world’s third-biggest economy.
The risk of a world recession amid sweeping monetary policy tightening since last year has cast a pall over export-led economies, with many countries including Japan relying on domestic consumption to underpin growth.
The trade data, released by the Ministry of Finance on Thursday (Jul 20), showed exports rose 1.5 per cent year on year last month, below the 2.3 per cent gain expected by 15 economists in a Reuters poll, but faster than a 0.6 per cent rise in May.
Exports were led by US bound shipments of cars and mining machinery.
Imports fell 12.9 per cent year on year in June, versus the median estimate for a 11.2 per cent decrease. The decline in the value of imports, caused by drops in crude, coal and liquefied natural gas, should help ease concerns about rising costs of purchases.
The overall trade numbers produced a trade surplus of 43 billion yen (S$408.5 million), confounding the median estimate for a 90.1 billion yen deficit.
A weak yen and surging import costs have led to several months of trade deficits in Japan, another challenge for policymakers hoping to shore up a fragile recovery following the end of Covid curbs.
By region, exports to China, Japan’s largest trading partner, fell 11 per cent year-on-year last month, due to drops in shipments of steel, chips and nonferrous metal, following a 3.4 per cent decline in May.
US-bound shipments, Japan’s major ally, rose 11.7 per cent year-on-year in June, led by shipments of cars and construction and mining machinery, following a 9.4 per cent rise in the previous month. REUTERS
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