TOKYO: Japan’s exports grew at the slowest pace in more than a year in September, with a drop in shipments to Asia all but overwhelming gains in sales to Europe and the United States.
The trade data are one of the most crucial economic indicators before the Bank of Japan (BoJ) meets on October 30 to consider whether the nation needs more monetary stimulus to stoke inflation and economic activity. Exports to China, India, Indonesia, Thailand and Malaysia all fell as the slowdown in China’s economy sapped demand across Asia.
The value of Japanese shipments rose just 0.6 per cent in September from a year earlier, marking the third straight month of waning growth, the Finance Ministry reported on Wednesday. Economists surveyed had expected a 3.8 per cent increase. The value of imports sank more than 11 per cent, underscoring a lack of demand in Japan’s domestic economy as well as falling oil prices.
“The numbers confirm that Japan’s economy is in a soft patch,” said Taro Saito, the director of economic research at NLI Research Institute in Tokyo. “It’s too optimistic for the central bank and the government to be saying the recovery is continuing.”
The economy contracted in the second quarter and a slump in industrial production in August prompted some economists to predict Japan went backwards again in the third quarter. The weakness in exports in September was also apparent when measure by the volume of shipments, with a 3.9 per cent decline from a year earlier.
The yen was little changed at 119.91 per US dollar in Tokyo while the Topix stock index advanced 0.7 per cent amid speculation that pressure is building on the BoJ to consider adding to stimulus.
NLI’s Saito said it is hard to make a call on monetary policy because the central bank has repeatedly said there is improvement in inflation trends. Some 42 percent of economists surveyed from September 29 to October 2 forecast the BoJ will boost stimulus later this month.
Exports to the US rose more than 10 per cent in September, with strength in sales of cars and pharmaceuticals. Shipments to Europe advanced 5.1 per cent while exports to China dropped 3.5 per cent. The volume of crude oil imports rose 1.1 per cent in September while the value dropped almost 44 per cent after a rout in the energy market over the past year.
The trade deficit for September was €114.5 billion ($955 million), compared to expectations for a surplus of €87 billion yen.
