Japan’s exports grow at slowest pace in eight months

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TOKYO (Businesshala) – Japan’s export growth halted a seven-month double-digit expansion in October as slowing US- and China-bound car shipments exposed risks to the export-dependent economy from global supply constraints.

FILE PHOTO: Containers are seen at an industrial port in Keihin Industrial Area in Kawasaki, Japan September 12, 2018. Businesshala / Kim Kyung-hoon

The slow growth reflects Japan’s supply chain constraints that have been particularly disruptive to the car industry and bleak the outlook for overseas demand.

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Exports rose 9.4% year-on-year in October, Finance Ministry data showed on Wednesday, slightly below the average market forecast for a 9.9% growth in a Businesshala poll. This followed a rise of 13.0% in the prior month.

By region, exports to China, Japan’s biggest trading partner, grew 9.5% in the 12 months to October, slowing from 10.3% in the previous month as car shipments to the country fell 46.8%.

US-bound shipments, another major market for Japanese goods, rose just 0.4% in October, also weighed down by a decline in car exports, which fell 46.4%.

Imports grew 26.7% in October, against the average estimate for a 31.9% increase, bringing the trade balance to a deficit of 67.4 billion yen ($586.60 million), compared to the average estimate for a 310.0 billion yen deficit.

Separate government data showed that core machinery orders, which serve as a leading indicator of capital spending in the coming six to nine months, were flat in September compared to the previous month, posting an expected 1.8% gain. were down with.

Weaker-than-expected core orders indicate corporate Japan’s reluctance to commit to stronger capital spending as global supply constraints pose risks to the output and export outlook.

After a 0.7% gain in the previous quarter, manufacturers were expecting core orders to grow by 3.1% in October-December.

Japan’s economy shrank faster than expected in the third quarter due to a decline in consumption, trade spending and exports, which was suffering from a resurgence in COVID-19 infections and disruptions in chip and parts supply.

The government is expected to announce a fiscal stimulus package of “several tens of trillions of yen” on Friday, aimed at easing the pain of the COVID-19 pandemic and reviving the economy.

($1 = 114.900 yen)

Reporting by Kantaro Komiya and Daniel Leussink; Additional reporting by Kentaro Sugiyama; Editing by Sam Holmes


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