Japan posted a trade deficit last month as exports sank for the first time in more than two years, dragged down by a slowdown overseas.
The trade deficit totaled ￥78.7 billion (US$539 million), the Japanese Ministry of Finance said yesterday, the first trade deficit for the world’s third-largest economy in two months.
Exports shrank most markedly for the rest of Asia, including China, Singapore and Taiwan, declining 0.3 percent from ￥8.73 trillion a year earlier.
Photo: EPA-EFE
Exports recovered in autos and auto parts, as the social restrictions related to the COVID-19 pandemic eased gradually. However, that was not enough to offset the drop in exports in computers, computer chips, machinery and other manufactured goods.
Imports fell in various sectors, including food, machinery and energy, slipping 13.5 percent from the previous year to ￥8.8 trillion, the ministry said.
Imports to Japan dipped not only from Asia, but many other areas, including the US, Mexico, Russia and Middle East countries.
The yen continues to be weak, trading at about ￥146 to the US dollar lately. That likely means worries would persist about the strength of Japan’s economic recovery.
A key factor for Japan is the strength of the Chinese economic rebound from the damage related to the pandemic. Some analysts say China’s rebound is shaky.
The relatively pessimistic read on Japan’s trade follows a bit of brighter news that came earlier this week, in which the government said that Japan’s economy grew at an annual pace of 6 percent in April-to-June, marking the third straight quarter of growth as exports and inbound tourism recovered.
“I sense the export decline to China is worse than the worldwide decline, although they are related. We also need to assess the impact US-China tensions may be having on trade,” Sayuri Shirai, a professor of policy management at Keio University, said in a commentary in the Nikkei Shimbun.
Separately, Morgan Stanley is the latest among some of the major brokerages to cut China’s economic growth forecast for this year, following a spate of disappointing data from the country and worries over its embattled property sector.
The US bank now sees China’s GDP growing 4.7 percent this year, down from an earlier forecast of 5 percent, it said in a note on Wednesday. It has also lowered its GDP forecast for next year to 4.2 percent from 4.5 percent.
Earlier this week, JPMorgan Chase & Co cut China’s GDP growth forecast to 4.8 percent this year from 5 percent earlier, while Barclays PLC cut it to 4.5 percent.
Beijing had set a growth target of about 5 percent for this year.
Additional reporting by Reuters
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