TOKYO: Japan’s exports in October fell for the first time in more than a year, stoking worries the world’s third-largest economy may struggle to recover from a recession as weak overseas demand dims the trade outlook.
Ministry of Finance data showed on Thursday that exports fell 2.1 per cent in October from a year earlier, matching economists’ median estimate. On the month, exports rose 0.6 percent, marking the first increase in four months.
It was the first annual decline since August 2014 when a decline in US-bound exports hurt overall shipments.
The soft figures follow just days after third-quarter data showed Japan slipped into its fourth recession in five years, casting doubt about the effectiveness Prime Minister Shinzo Abe’s reflationary policies known as “Abenomics”.
The run of weak data add to doubts the Bank of Japan will be able to accelerate inflation to its ambitious 2 per cent target in the latter half of next fiscal year to March 2017. Nonetheless, the central bank is widely expected to keep monetary policy steady at its rate review that ends on Thursday.
Analysts expect a modest rebound in the economy over the current October-December quarter.
“Exports show signs of bottoming out, but given declining export volume, they are unlikely to become a driver of growth in the current quarter as effects of China’s slowdown and falling commodity prices are spreading to other countries,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
“The data probably came as neutral to the BOJ’s outlook.”
A slowdown in China, Asia’s locomotive, has chilled exports and economic growth across many of the region’s trade-reliant economies. Japanese manufacturers have also been hit by the downturn in the world’s No 2 economy.
The MOF data showed China-bound exports fell 3.6 per cent year-on-year in October, down for a third straight month on falling shipments of items such as steel and car parts.
Shipments to Asia – which account for about a half of Japan’s overall exports – fell 3.6 per cent in October, the second straight month of annual declines.
Exports to the United States, a major buyer of Japanese products, rose 6.3 per cent in October, led by shipments of cars, while EU-bound shipments rose 5.4 per cent on rising car exports.
Imports fell 13.4 per cent in October versus a year ago, swinging the trade balance to a surplus of 111.5 billion yen (S$1.28 billion), the first trade surplus in seven months.
