- Exports in October were +1.6% compared to the previous year, and imports were -12.5%.
- Trade balance returns to deficit
- Exports will bottom out in mid-2024 – Analyst
TOKYO, Nov 16 (Reuters) – Japan’s exports rose for the second consecutive month in October, but the pace was slowed by weak chip and steel shipments to China as weaker external demand hits the trade-dependent economy. has slowed down significantly.
Exports rose 1.6% in October from a year earlier, the Finance Ministry said on Thursday, higher than the 1.2% increase expected by economists polled by Reuters, but slower than the 4.3% increase seen in September.
Weak exports are complicating Japan’s efforts to boost economic growth, and weak domestic demand is also weighing on the post-pandemic recovery.
Atsushi Takeda, chief economist at Itochu Economic Research Institute, said, “With the Chinese economy hitting rock bottom and demand in the United States and Europe slowing, we will have to wait until the middle of next year for exports to bottom out.” .
“Until then, Japan will need to rely on consumption and capital investment to recover from the slump.”
Some economists have warned that in the absence of growth drivers, Japan could slip into a technical recession, defined as two consecutive quarters of recession.
Data on Wednesday showed Japan’s economy slumped from July to September, ending two consecutive quarters of expansion due to sluggish consumption and exports.
By export destination, exports to China, Japan’s largest trading partner, decreased by 4.0% in October compared to the same month last year, marking the 11th consecutive month of decline.
Japan’s exports to the United States, a key ally, rose 8.4% in the year to October as demand for hybrid cars and mining and construction equipment pushed shipments to the U.S. to record highs.
Imports fell 12.5% in the year to October, roughly in line with the median forecast for a 12.2% decline.
The trade balance was in the red at 662.5 billion yen ($4.38 billion), compared to the median estimate of a deficit of 735.7 billion yen.
Separate data released by the Cabinet Office showed that Japan’s core machinery orders, a leading indicator of capital investment, rose 1.4% from the previous month in September, beating expectations for a 0.9% increase.
In one positive sign of domestic recovery, the manufacturing industry surveyed by the Cabinet Office expects core orders to rise 0.5% in the October-December period, after falling 1.8% in the previous quarter.
(1 dollar = 151.1900 yen)
Reporter: Additional report by Satoshi Kajimoto and Tetsu Sugiyama.Editing: Sam Holmes
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