TOKYO: Japan’s exports are expected to have fallen for a 10th straight month in July on lacklustre global demand and a strong yen, a Reuters poll showed on Friday. Exports likely declined 14.0 percent in July from a year earlier, accelerating from 7.4 percent fall in June, the poll of 19 analysts found.
Imports were seen falling 20.6 percent from a year ago, which would result in a trade surplus of 283.7 billion yen ($2.78 billion). That would be a second straight monthly trade surplus. “Worries about the worsening global economy have subsided but it remains in a situation of low growth,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Pressure on the yen to appreciate remains strong and oil prices have started picking up since early this year, so there is a low likelihood the trade surplus will expand going forward.” A stronger yen would make Japan’s export goods less competitive in the global market and squeeze exporters’ profits. The dollar was hovering around 102.00 yen on Friday, not far from the post-Brexit low of 99 yen.
The finance ministry will issue the trade data at 8:50 a.m. on Aug. 18 (2350 GMT Aug. 17). Data due on Monday is expected to show Japan’s economic growth slowed in the second quarter, weighed down by weak domestic demand and stagnant exports. Gross domestic product (GDP) was expected to expand at an annualised rate of 0.7 percent in April-June, a separate poll showed, following 1.9 percent annualised growth in the first quarter. Prime Minister Shinzo Abe’s cabinet approved fiscal measures of 13.5 trillion yen ($132 billion) earlier this month to revive the economy.
The Bank of Japan said it will conduct a “comprehensive review” at its meeting next month of the effects of monetary policy. A preliminary outline of the review shows it will maintain a pledge to hit its 2 percent inflation target as soon as possible, sources told Reuters.
