Japan exports slump on weak China demand, heaping pressure on economy

Wed, 2019-04-17 03:38

TOKYO: Japan’s exports fell for a fourth straight month in
March as China-bound shipments slumped again, reinforcing growing
anxiety that weak external demand is likely to have knocked first
quarter economic growth. Ministry of Finance data out on Wednesday
showed exports fell 2.4 percent in March from a year earlier,
compared with a 2.7 percent drop predicted by economists in a
Reuters poll, and followed a 1.2 percent decline in February. The
data reinforces worries that weak external demand may hurt company
profits and in turn curb business expenditures, workers’ wages
and consumer spending in a broad hit to growth. Some analysts
expect Japan’s economy likely swung back to a mild contraction in
the first quarter as declines in exports and capital expenditure
dented private consumption. That would pile pressure on Prime
Minister Shinzo Abe to once again delay a planned sales tax hike in
October needed to fix the world’s heaviest public debt burden at
twice the size of its economy. The economy grew at an annualized
rate of 1.9 percent in the fourth quarter driven by business and
consumer spending. Bank of Japan Governor Haruhiko Kuroda last week
stuck to his optimism that Japan’s export-dependent economy will
soon climb out of its doldrums as global growth recovers. Kuroda,
however, did warn of lingering risks to the global outlook,
including the outcome of US-China trade talks and Britain’s
potentially messy departure from the European Union. Markets expect
the BOJ to stand pat at a rate review next week, though some
investors say the recent batch of soft indicators may pile pressure
on policymakers to add to the central bank’s already massive
stimulus later in the year. Wednesday’s data came on the heels of
this week’s bilateral trade talks between Tokyo and Washington.
US President Donald Trump has prodded Japanese automakers to boost
more jobs in the United States as the White House has threatened to
impose tariffs of up to 25 percent on imported vehicles, on the
grounds of national security. Imports of Japanese cars make up
about two-thirds of Japan’s $69 billion annual trade surplus with
the United States. US-bound exports rose 4.4 percent in the year to
March, driven by car shipments, which grew 5.1 percent. Imports
from the United States declined 0.2 percent, resulting in Japan’s
trade surplus with the country rising 9.8 percent year-on-year to
683.6 billion yen. Exports to China, Japan’s biggest trading
partner, fell 9.4 percent year-on-year in March, reversing from a
5.6 percent gain in February. Asia-bound shipments, which account
for more than half of overall exports, fell 5.5 percent, down for a
fifth straight month. Japan’s overall imports rose 1.1 percent in
the year to March, undershooting the median estimate for a 2.6
percent annual increase, resulting in a trade surplus of 528.5
billion yen. 

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Source: FS – All-News-Economy
Japan exports slump on weak China demand, heaping pressure on economy