Tokyo: Japan’s exports in July suffered their sharpest monthly fall in seven years, data showed yesterday, as a surging yen clouds the country’s trade picture, with shipments of cars, ships and steel all tumbling.
The gloomy export figures come despite Japan logging a bigger-than-expected trade surplus as imports also dropped at their fastest rate since 2009.
The finance ministry said the value of exports last month fell 14 per cent from a year earlier, the 10th straight monthly fall, while imports dropped nearly 25pc, leaving Japan with a trade surplus of 513 billion yen ($5.1bn).
That reversed a year-earlier deficit and was bigger than the 273.2bn yen surplus expected by economists. But yesterday’s export data are the latest reminder that Tokyo’s policy remedies for stoking growth in the world’s No 3 economy have failed to gain traction.
Japan’s economy stalled in the April-June quarter, separate GDP figures showed this week, confounding Tokyo’s massive spending and monetary easing campaign.
The world’s third-largest economy registered zero growth on-quarter, falling below economists’ expectations for a modest 0.2pc expansion, as weak exports and a fall in business spending dented activity.
Japan’s major exporters have seen their bottom line dented by a sharp rally in the yen, which makes them less competitive overseas and shrinks the value of repatriated profits.
Wild volatility on global financial markets since the start of the year and Britain’s shock vote to leave the European Union have stoked demand for Japan’s currency, which is seen as a safe investment in times of turmoil.
Japan’s shipments to the US, China and European Union all declined. Among the declines last month, vehicle shipments fell 11.5pc, but analysts said they may rebound.
“Movements in trade values continue to reflect the plunge in import and export prices over the past year,” Marcel Thieliant from research house Capital Economics said in a commentary.
“This is mostly the result of the stronger exchange rate, as the majority of both imports and exports are invoiced in foreign currency rather than in yen.”