Japan exports fall sharply in September due to slow demand in Asia
(Reuters) – Japan’s export growth fell well short of expectations in September as the country posted a record run of trade deficits, a sign that slowing demand in Asia is taking the shine off Prime Minister Shinzo Abe’s stimulus policies.
In volume terms Japan’s exports fell on the month, adding to the weak picture for Asia’s trade-reliant economies, after China last week reported a surprise slide in exports for September.
Taiwan’s export orders – a leading indicator of activity over the next two or three months – highlighted similar signs of slowing demand in the region.
“There is really no change in the main thing that’s going on across Asia – which is no growth in exports the past two years. I think it’s weak global spending, it’s as simple as that,” said
Tim Condon, regional economist for ING in Singapore.
A sharp drop in Japan’s export volume despite the boost from a weak yen, which lifts the competitiveness of Japanese goods, could curb third-quarter economic growth.
Japanese policymakers are counting on overseas growth to pick up in time to make up for an expected slump in personal spending after the sales tax is raised next April.
Persistent trade gaps in Japan also add to concerns the country could end up spending more overseas than it earns, adding to strains caused by the country’s debt burden, the heaviest among industrialized nations.
Exports rose 11.5 percent in September from a year earlier, less than a median market forecast for a 15.6 percent increase, trade data from the Ministry of Finance showed.
A notable slowdown was in exports to Asia, which rose just 8.2 percent after increasing 13.5 percent in August, suggesting that weak demand in countries such as Indonesia and Thailand – big markets for Japanese automakers – was taking a toll.
Real exports, which the BOJ calculates by stripping out the effect of price changes, is considered a good indicator of volume trends. They fell 4.4 percent from the previous month.
With the weak yen inflating the cost of importing fuel, Japan logged a trade deficit of 932 billion yen ($9.5 billion) in September, running a negative balance for the 15th straight month.
