JAKARTA (TheInsiderStories) – Exports from Japan declined 7.9 percent in November 2019 from a year earlier to ¥6.38 trillion (US$58.29 billion), the 12th straight month of fall, official data released on Wednesday (12/18), mainly due to lower sales of manufactured goods to its main trading partners China and the United States (US).
The data showed Japan’s sales of manufactured goods falls to 11.1 percent from 13.4 percent in October, transport equipment (-9.7 percent vs -7.4 percent), machinery (-12.0 percent vs -12.9 percent), chemicals (-7.4 percent vs -9.7 percent), and electrical machinery (-5.4 percent vs -8.3 percent). In contrast, foodstuff exports grew by 1.2 percent.
Exports in volume terms, which exclude the exchange rate impact, dropped 5.0 percent in the year to November, the largest fall since August and the fourth consecutive month of declines. Industrial output slipped at the fastest pace in nearly two years in October while retail sales and household spending slumped following the sales tax hike.
Japan’s economy grew at a much faster pace than initially reported in the third quarter, data showed last week, thanks largely to improvements in business spending and private consumption. But there are worries the third-quarter strength is masking widening cracks in the economy after the government went ahead with a nationwide tax hike in October, giving a big hit to corporate and household sentiment.
Japan’s economy has been caught in the crossfire of the trade war between the US and China this year, with increased protectionism and a related global slowdown hurting output and exports from the country. The Bank of Japan, however, is seen keeping monetary policy on hold at its two-day policy meeting ending on Thursday as progress in U.S.-China talks and a $122 billion fiscal package at home take some pressure off the central bank to support growth.
By region, exports to China, Japan’s biggest trading partner, lost 5.4 percent year-on-year in November, down for the ninth month as shipments of chemicals and car parts declined. Exports to Asia, which account for more than half of Japan’s overall exports, dropped 5.7 percent in the year to November largely due to declining shipments of flat rollers to Thailand.
Japan’s shipments to the US declined for the fourth straight month, falling 12.9 percent in the year to November, hurt by reduced shipments of cars, construction machinery, and car parts. Under the trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increased by about $200 billion over the next two years.
Japanese Prime Minister Shinzo Abe previously agreed his own limited trade deal with the US, which was approved by Japan’s parliament this month, clearing the way for tariff cuts next year on items including US farm goods and Japanese machine tools.
Meantime, the nation’s overall imports sank 15.7 percent year-on-year, marking their biggest decline since Oct. 2016, and a larger fall than the median estimate for a 12.7 percent decrease. That decline in imports led to an ¥82.1 billion trade deficit, smaller than the ¥369.0 billion yen shortfall seen by economists.
Written by Lexy Nantu, Email: firstname.lastname@example.org