Japan’s exports rose at the slowest pace this year last month, data showed yesterday, as a strong yen and easing growth overseas continue to threaten a faltering recovery. While the data was better than expected, it still pointed to increasing fears that Japan’s economy is facing a slowdown after the government last week downgraded its view of the economy for the first time since February last year.
The Japanese currency has in recent weeks traded at 15-year highs, hammering the competitiveness of the crucial export sector, despite a yen-selling intervention by authorities last month.
Japan’s exports last month rose 14.4 percent on-year to ¥5.84 trillion (US$72 billion), buoyed by increases in shipments of automobiles, ships and steel products.
PHOTO: BLOOMBERG
Markets had expected a rise of 7.9 percent, according to a Dow Jones Newswires poll of economists. However, the figure was below August’s 15.5 percent rise and demonstrated the slowest pace of export growth since December last year. Imports grew 9.9 percent to ¥5.05 trillion, the data showed. While last month’s trade surplus gain of 54 percent showed Japan’s rebound from the plunge in exports triggered by the financial crisis, the data pointed to future weakness, said Taro Saito, a senior economist at NLI Research Institute.
“The weak export trend will continue for the time being,” Saito said. “The yen will continue to be strong at least for the next several months.”
Analysts warn that risks to demand remain as the effects of stimulus measures wane and world leaders embrace tighter fiscal policies to help rebalance a global economy knocked off its axis by the financial crisis.
“The rebound in exports is already running out of steam,” noted consultancy firm Capital Economics in a research note. “With global demand growth also slowing, the boost from net trade will fade away.”
Exports to Japan’s key trading partner China continued to moderate last month, rising 10.3 percent last month to ¥1.081 trillion after climbing 18.5 percent in August to ¥1.048 trillion.
A strong yen not only makes Japan’s growth-driving exports more expensive but also erodes companies’ overseas profits when repatriated.
Toyota Motor is expected to revise its US dollar forecast for the second half of the business year to March from ¥90 to ¥80, which would lower its earnings by ¥150 billion in the year’s second half alone, the Yomiuri daily reported yesterday.
Japan has reduced its official interest rate to almost zero and last month intervened in the foreign exchange market for the first time in six years to sell the yen after it hit a 15-year high against the dollar.
However, the moves failed to halt the Japanese currency’s ascent.
International tensions have flared over the issue of currencies as a wave of speculative money makes Asian goods more expensive on global markets, prompting government moves to safeguard exports amid fears of a currency devaluation battle.
However, with a large trade and current account surplus, Japan has a relatively weak case to lower its currency to boost exports, some analysts argue.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained