Japan’s export growth slows as US bound vehicle shipments drop

Tokyo, Japan

Exports increased 3.9 percent from a year ago

Japan’s export growth fall in July, with shipments of cars to the United States falling and as international trade disputes cast doubt over demand for items from the country.

Exports increased 3.9 percent from a year ago, Finance Ministry data revealed on Thursday, well under the 6.3 percent boost forecast by economists and slowing from June 6.7 percent rise.

Japan’s exports to the United States dropped 5.2 percent, a second straight decreased, paced by a 12.1 percent drop in car shipments.

There were no immediate indications that trade tensions with Washington have impacted Japan’s auto sector, but experts say external risks are boosting.

“While caution is heightening over US trade policy, US car sales are leveling off, leading Japan’s car exports to the United States to level off as well,” stated Takeshi Minami, chief economist at Norinchukin Research Institute.

“If capital outflows from developing economies accelerate on top of this, it would result in a marked slowdown in the global economy, further weighing on Japan’s exports.”

President Donald Trump is pushing Japan and other countries to decrease their trade surpluses with the United States and has cautioned to raise tariffs on the critical auto sector after boosting them on steel and aluminium.

Japanese automakers have shown no indication, though, of rushing to increase car shipments to the United States in expectation of higher levies.

Imports from the United States increased 11.0 percent in July, led by crude oil, motors and liquefied petroleum gas.

Because of that, Japan’s trade surplus with the United States dropped 22.1 percent year-on-year to 502.7 billion yen ($4.55 billion).

Exports to China increase 11.9 percent in July from a year earlier.

Shipments to Asia, which account for over a half of Japan’s total exports, increased 8.0 percent, led by semiconductor production equipment and electronics components for China and sales of steel to Thailand.

Total imports increased 14.6 percent in the year to July, approximately matching economists’ median estimate, leading in a trade deficit of 231.2 billion yen, immensely exceeding the anticipated 50 billion yen.

Thursday’s trade figures follow gross domestic product (GDP) data last week revealed Japan’s economy, the world’s third largest, bounced in the second quarter from a January-March dip.

Japan’s economy increased at an year rate of 1.9 percent in the second quarter on the back of household and business spending, recovering from a previous contraction.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.