JAKARTA (TheInsiderStories) – Japanese exports fell 6.3 percent from a year earlier to JPY 6.58 trillion (US$59.52 billion) in December 2019, marking the thirteenth consecutive month of declines in overseas sales, compared to a 7.9 percent tumble in November and market expectations of 4.2 percent slump, Ministry of Finance data showed Thursday (01/23).
Meantime, imports slipped 4.9 percent to JPY 6.73 trillion, after plunging 15.7 percent in November and compared with market forecasts of a 3.4 percent fall. So, Japan’s trade deficit rose to JPY 152.5 billion in December 2019 from JPY 55.7 billion a year earlier and compared with market expectations of JPY 150 billion, the data showed.
The value of shipments overseas the country weighed down by lower shipments of transport equipment (-10.7 percent), of which cars (-11.6 percent) and parts of motor vehicles (-10.9 percent); manufactured goods (-9.1 percent), such as iron & steel products (-13.3 percent); machinery (-6.2 percent), mostly power generating machines (-6.1 percent); electrical machinery (-3.2 percent) and chemicals (-4.8 percent).
Still, the report also showed strong gains in shipments of semiconductor-making equipment, adding to evidence of a bottoming of the global tech cycle. That’s a positive for Japan’s outlook, even if economists expect a recovery in the overall figure to be slow.
Exports to China, the country’s single biggest overseas market, also inched up of 0.8 percent for the first time in 10 months, followed by Hong Kong (2.3 percent) and Taiwan (13.3 percent). While other major trading partners, sales declined to South Korea (-16.2 percent), Thailand (-15 percent), the United States (-14.9 percent) and Germany (-4.6 percent).
The monthly data cap a miserable year for Japanese shipments abroad. Exports in 2019 fell 5.6 percent for the first drop in three years. The ongoing drop in exports adds to headwinds facing a Japanese economy forecast to have shrunk an annualized 3.7 percent in the fourth quarter as domestic factors, including typhoon damage and a hike in the sales tax, hit growth.
Still, accelerating gains in shipments of chip-making equipment, which rose 25.8 percent in December, could indicate a turnaround in the tech industry, whose yearlong slump has been a large factor in Japan’s trade woes.
The trade agreement signed this month between the US and China should also brighten the outlook for shipments in 2020, although tensions could flare up again. In the near-term, there’s also less onus now on Japan’s exports to support growth since the Prime Minister Shinzo Abe administration last month unveiled $120 billion in economic stimulus measures.
The package was a big reason the Bank of Japan this week raised its growth forecast for the coming fiscal year, though it warned that overseas risks still need careful monitoring.
Written by Lexy Nantu, Email: email@example.com