ALBAWABA – The Japanese Yen is slipping as Japan exports fall for the first time since 2021, according to data released Thursday by the Ministry of Finance.
Weighed down by faltering demand for light oil and chip-making equipment, Japan exports fell year-on-year by 0.3 percent in July, compared to a 0.8 percent decline forecast by economists in a Reuters poll.
Notably, Japan exports increased 1.5 percent in June, year-on-year.
Meanwhile, separate data by the Japanese Cabinet Office showed a key gauge of capital expenditures rose in June.
However, manufacturers are bracing for core orders to slide during the current quarter, partly due to the impact from weak offshore demand, according to Reuters.
Policymakers in Japan are counting on exports to shore up the world's third-largest economy and pick up the slack in private consumption, which has suffered due to broader price hikes.
But "China remains weak and I don't see demand from Europe and America to accelerate further," Takeshi Minami, chief economist at Norinchukin Research institute, told Reuters.
It is possible that Japan's economy may suffer a downturn in the current quarter, he added.
By destination, Japan exports to China, the country's largest trading partner, fell 13.4 percent year-on-year in July, due to drops in shipments of cars, stainless steel and IC chips. The July decline followed a 10.9 percent fall in June, official figures showed.
However, Japan exports to the US have been rising year-on-year with July exports up 13.5 percent, logging the largest in value on record, and June exports up 11.7 percent.
Nonetheless, the spectre of a sharper global slowdown and faltering growth in Japan’s major export markets, including China and excluding the US, have raised concerns about the country’s outlook.
The World Bank has warned that higher interest rates and tighter credit will take a bigger toll on global growth in 2024.
The concerns about global growth was underscored by separate data earlier showing persistent declines in Singapore's exports. Exports are generally seen as a gauge of overseas demand as trade flows dwarf the city-state's economy.
