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.
MediaTek Inc (聯發科), the world’s biggest smartphone chip supplier, yesterday said it plans to double investment in data center-related technologies, including advanced packaging and high-speed interconnect technologies, to broaden the new business’ customer and service portfolios. The chip designer is redirecting its resources to data centers, mainly designing application-specific integrated circuits (ASIC) with artificial intelligence (AI) capabilities for cloud service providers. The data center business is forecast to lead growth in the next three years and become the company’s second-biggest revenue source, replacing chips used in smart devices, MediaTek president Joe Chen (陳冠州) told a media event in Taipei. “Three or four years
CHIP HANG-UP: Surging memorychip prices would deal a blow to smartphone sales this year, potentially hindering one of MediaTek’s biggest sources of revenue MediaTek Inc (聯發科), the world’s biggest smartphone chip designer, yesterday said its new artificial intelligence (AI) chips used in data centers are to account for 20 percent of its total revenue next year, as cloud service providers race to deploy AI infrastructure to meet voracious demand. MediaTek is believed to be developing tensor processing units for Google, which are used in AI applications. While it did not confirm such reports, MediaTek said its new application-specific IC (ASIC) business would be a new growth engine for the company. It again hiked its forecast for the addressable ASIC market to US$70 billion by 2028, compared
Until US President Donald Trump’s return a year ago, when the EU talked about cutting economic dependency on foreign powers — it was understood to mean China, but now Brussels has US tech in its sights. As Trump ramps up his threats — from strong-arming Europe on trade to pushing to seize Greenland — concern has grown that the unpredictable leader could, should he so wish, plunge the bloc into digital darkness. Since Trump’s Greenland climbdown, top officials have stepped up warnings that the EU is dangerously exposed to geopolitical shocks and must work toward strategic independence — in defense, energy and
Motorists ride past a mural along a street in Varanasi, India, yesterday.
RSS