TOKYO: Japan’s exports in May are forecast to have risen for a ninth straight month on solid demand from the United States, although a slowdown in China remains a worry for an economy just starting to gather momentum after a slump last year.
Recent upbeat data offered hope that Japanese companies are beginning to invest in capacity – which would eliminate one of the biggest drags in the world’s third-largest economy.
Exports growth, as well as domestic demand, will be crucial to this end, analysts say, noting that weakness in China presents a challenge.
“Export volume to Asian nations has been weak recently, especially to China, which is a worry,” said Yuichiro Nagai, economist at Barclays Securities Japan.
“Although a weak yen helps exports, its benefit is not as big as it used to be. The fundamental issue is weak demand from Asia, while solid demand from the United Stated and Europe underpins exports.”
Exports are seen up 3.5 percent in May from a year ago, the Reuters poll of 23 economists showed, following a 8.0 percent rise in April and a 8.5 percent increase in March.
Imports are forecast to have fallen an annual 7.5 percent, down for a fifth straight months, leading to a trade deficit of 226.0 billion yen ($1.83 billion) in May, the poll showed. The trade deficit was 55.8 billion yen in April.
The economy expanded much faster than initially expected in the first quarter as firms boosted business investment, underscoring the central bank’s view that a recovery from last year’s recession is gaining momentum.
The BOJ last month kept its massive monetary stimulus and offered a slightly more upbeat view of the economy.
The yen, which tumbled to a 13-year low against the dollar earlier this month on solid U.S. data, has bounced somewhat. [FRX/]
The Japanese currency is still down about 20 percent for the year, but the benefits to the economy hasn’t been as high as in the past because several big manufactures have shifted production overseas in the past decade.
