Japan’s export growth hits two-year low on weak China demand

JAPAN’S export growth hit its weakest pace in more than two years in April as China-bound shipments slumped amid lingering worries about faltering global economic demand.

Exports rose 2.6 per cent in April from a year earlier, Ministry of Finance data showed on Thursday (May 18), slower than a 3.0 per cent increase expected by economists in a Reuters poll and a 4.3 per cent rise in March. That marked the weakest gain since February 2021 when exports declined 4.5 per cent.

The world’s No 3 economy emerged from recession in the first quarter, helped by a boost in consumer spending and tourism following the end of Covid-19 pandemic restrictions, but weak exports are weighing on factory activity and hampering a broader recovery.

Exports slumped 4.2 per cent in January-March, the first decline in six quarters.

By destination, Japanese exports to China, the country’s largest trading partner, dropped 2.9 per cent in April year-on-year, dragged by declines in cars, car parts and steel shipments. It followed a 7.7 per cent decline in March and marked a fifth straight month of falls.

Imports fell 2.3 per cent in April, much bigger than the median estimate for a 0.3 per cent decrease and the first annual decline in 27 months, as prices of crude oil and other commodities fell.

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The trade balance came to a deficit of 432.4 billion yen (S$4.22 billion), versus the median estimate for a 613.8 billion yen shortfall. REUTERS