Japan’s exports grow most since 2022 on boost from weak yen
JAPAN’S exports grew at the fastest clip since late 2022 as the weak yen boosted their value, a positive development for the nation’s manufacturing sector.
Exports increased 13.5 per cent from a year ago in May, marking a sixth month of gains, the Finance Ministry reported on Wednesday (Jun 19). The gain outpaced economists’ consensus estimate of a 12.7 per cent increase, and it was the largest since November of 2022.
Imports advanced by 9.5 per cent, in line with estimates. The trade deficit came to 1.2 trillion yen (S$10.3 billion), widening from 466 billion yen in April.
Growth in exports came amid mixed signals from key overseas markets. Data on Tuesday showed that US retail sales barely rose in May, while prior months were revised lower. At the same time, industrial production surged on the back of the output of consumer goods. Meantime, China’s retail sales growth beat consensus in May even as the property slump deepened, and household consumption in the euro area is expected to pick up a tad this year.
By region, Japan’s exports to the US jumped 23.9 per cent, while those to China increased 17.8 per cent and shipments to the EU fell by 10.1 per cent.
Car exports rose 13.6 per cent as automakers, including Daihatsu Motor, increasingly resumed operations after temporarily halting production in the wake of a safety certification scandal. It’s unclear if that momentum will carry over into the coming months, as the scandal has since spread. Japan recently suspended the delivery and sales of six vehicles, including three manufactured by Toyota Motor, after a government probe found falsified or manipulated safety data.
Other products that gained included semiconductor manufacturing equipment and electronic components.
Stronger-than-expected shipments were also driven by the country’s weak currency. The yen traded at an average of 155.48 against the US dollar in May, 14.9 per cent weaker than a year ago, the ministry said.
While the beleaguered currency provided a tailwind for exporters, there is growing concern among importers about a resurgence of cost-push inflation. More than 60 per cent of surveyed Japanese firms said the weak yen would hurt their profit, according to a report by Teikoku Databank in May. BLOOMBERG
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