Japan’s exports shrink for first time in more than two years

JAPAN’S exports dropped for the first time in more than two years as demand slumped in several key overseas markets, signaling headwinds for the economic recovery.

The value of exports fell 0.3 per cent in July from a year earlier, retreating for the first time since February 2021, the finance ministry reported Thursday.

Economists had forecast a 0.2 per cent decline. Imports fell for a fourth month, sliding 13.5 per cent from the previous year, the steepest decline since September 2020. Economists had estimated they would fall by 15.2 per cent. 

The trade balance slipped back into the red, with a deficit of 78.7 billion yen (S$732.2 billion) after a 43 billion yen surplus in the previous month. Economists had expected the surplus to widen to 47.9 billion yen.

Exports data continued to highlight uneven economic conditions overseas. Shipments to the US rose by 13.5 per cent from a year ago, and those to Europe increased by 12.4 per cent.

Meanwhile, exports to China, a key trading partner for Japan, slid by 13.4 per cent, the largest drop since January, with shipments of cars and chips and chip components dipping at double-digit clips.

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Separate data also showed Japan’s core machinery orders rose 2.7 per cent in June from the previous month.

Compared with a year earlier, core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, declined 5.8 per cent. BLOOMBERG, REUTERS