Japan’s exports jump, adding to signs of economic recovery

JAPAN’S exports rose at a faster pace in July, helped by a weak yen and a pickup in the auto sector, in a sign of sustained economic recovery this quarter.

Exports gained 10.3 per cent from a year ago, accelerating from 5.4 per cent in the previous month, the Ministry of Finance reported on Wednesday (Aug 21). The result was broadly in line with the median economist estimate of an 11.5 per cent increase.

Imports climbed 16.6 per cent, compared with a 14.6 per cent gain estimated by analysts. With a larger increase in imports, the trade balance turned back to a deficit of 621.8 billion yen (S$5.6 billion).

The recovery in overseas shipments is likely to provide some relief for the Bank of Japan as it carefully watches the economy and financial markets after it helped fuel a global market meltdown this month, following another rate hike and hawkish signals from governor Kazuo Ueda.

The value of July’s export shipments was boosted by a weak yen, which the Ministry of Finance said traded at an average of 159.77 against the US dollar in July, 12.3 per cent weaker than a year ago.

The data also showed a clearer indication of a recovery in vehicle exports, after safety certification scandals weighed on that sector earlier this year.

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Toyota Motor, the world’s largest automaker, reported on Aug 1 that its profits climbed in the latest quarter after a weak yen and robust demand in North America boosted sales. Analysts are projecting the Japanese manufacturer to post record profits this year. BLOOMBERG