- June exports +1.5% y/y, imports -12.9%
- Falling value of imports eases pressure on spending
- Trade deficit turns into surplus for 1st time in 23 months
TOKYO, July 20 (Reuters) – Japan’s annual exports grew much less than expected in June, highlighting weak global demand that continues to slow the post-Covid recovery in the world’s third-largest economy.
The risk of a global recession amid severe monetary policy tightening since last year has caused a slowdown in export-led economies, with many countries including Japan relying on domestic consumption to support growth.
Trade data released by the Ministry of Finance (MOF) on Thursday showed exports rose 1.5% last month, below the 2.3% gain expected by 15 economists in a Reuters poll, but faster than the 0.6% rise in May.
Exports were led by US-bound exports of cars and mining machinery.
Imports fell 12.9% year-on-year in June, down from the median estimate of 11.2%. A decline in the value of imports caused by falling prices of crude, coal and liquefied natural gas will help ease concerns about rising procurement costs.
The overall trade numbers produced a trade surplus of 43 billion yen ($308.11 million), confounding the median estimate for a deficit of 90.1 billion yen.
A weak yen and rising import costs have led to months of trade deficits in Japan, another challenge for policymakers hoping to shore up a fragile recovery following the end of Covid restrictions.
By region, exports to China, Japan’s largest trading partner, fell 11% last month due to a drop in exports of steel, chips and non-ferrous metal, following a 3.4% drop in May.
Exports to Japan’s main ally the United States rose 11.7% year-on-year in June, following a 9.4% rise in the previous month, led by exports of cars and construction and mining machinery.
($1 = 139.5600 yen)
Reporting by Tetsushi Kajimoto Editing by Sri Navaratnam
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