Japan’s exports declined 1.7 percent year-on-year in September, marking the first decrease in 10 months, the latest data from the ministry of finance recently revealed. Meanwhile, imports grew 2.1 percent in September from a year earlier. As a result, the trade balance stood at a deficit of 294.3 billion yen ($1.97 billion).
Soft demand in China and slowing U.S. growth weighed on Japan’s exports. In addition, the yen’s recent rebound partly due to the Bank of Japan’s unexpected rate hike in late July further pushed down export values.
The decline in exports last month came after Japan revised its August data to reflect a 5.5 percent rise. In September, exports to China, Japan’s biggest trading partner, declined 7.3 percent from a year earlier. Meanwhile, those to the United States fell 2.4 percent, the data showed. Weak demand for automakers led the export declines for both countries.
Bank of Japan governor Kazuo Ueda has recently highlighted external risks such as U.S. economic uncertainties in his recent dovish commentary. The BOJ will likely keep interest rates steady at its October 30-31 meeting and maintain its forecast for inflation around its 2 percent target.
However, a quarterly central bank survey suggested that headwinds from the slowing global economy have yet to materialize for manufacturers, with the business mood holding up and companies retaining robust spending plans.
The U.S. dollar has been trading at 149 yen Japanese yen levels recently, not far from its level a year ago but up from about 120 yen two years ago. Inflation and rising energy prices have also pushed up import costs.
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