Japanese exports grew at their slowest pace of the year last month, data showed yesterday, underlining fears for the country’s main engine for growth as the trade-reliant recovery loses more steam.
The worse-than-expected data pointed to growing concerns that Japan’s economy faces a slowdown as a strong yen and slowing overseas demand threaten to further weaken exports as industrial production slows. Overseas shipments rose by a slower-than-expected 7.8 percent from a year ago, missing market expectations of 10.2 percent growth, the ministry of finance said.
It was the slowest export growth since November last year, which saw a 6.3 percent contraction before shipments rebounded the following month.
“We believe exports will turn negative for the first time in seven quarters in the October to December period,” Barclays Capital chief economist Kyohei Morita told Dow Jones Newswires.
“The yen’s strength and economic deceleration in the US and China, as well as a deteriorating shipment/inventory balance for IT-related goods in Taiwan and South Korea” should have a negative effect on Japan’s exports, he said.
The latest data underscore fears for an economy mired in deflation, with consumer prices continuing to slide and challenges Japanese Prime Minister Naoto Kan’s ambition to rein in the world’s biggest public debt at 200 percent of GDP. The exports figure for last month compared with 14.3 percent growth in September and a 15.5 percent rise in August, the ministry said.
Amid economic jitters in the eurozone, Japan’s exports to the EU fell 1.9 percent, the first fall in 11 months, while imports from Europe rose 1.9 percent.
“The fall in exports to Europe, in particular, reflects the softening of the eurozone economy, with most countries except for Germany struggling recently,” said Yasuo Yamamoto, senior economist at Mizuho Research Institute.
US-bound shipments rose by a modest 4.7 percent, the lowest pace of growth since December last year, when exports fell.
The growth of Asian demand is also waning, but China maintains a robust appetite for Japanese products.
China-bound exports grew 17.5 percent, rebounding from a 10.2 percent rise the previous month, while imports from China rose 9.8 percent.
With Japanese production already sliding, Yamamoto said the economy was headed for negative growth in the fourth quarter.
“With export growth slowing like this, it will be even harder for production to gain ahead,” he said.
The country’s exports for the month reached ￥5.72 trillion (US$68.5 billion), the 11th straight monthly increase, led by automobiles and engines, the finance ministry said.
Imports also rose 8.7 percent to ￥4.90 trillion, expanding for the 10th consecutive month amid demand for iron ore, coal and liquid natural gas.
Japan’s trade surplus rose 2.7 percent to ￥82.19 billion, marking the second consecutive monthly increase.
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