Japan export growth cools amid worries about China slowdown

TOKYO : Japanese exports rose in June for a seventh straight month, but the pace of growth slowed to its lowest since late last year, data showed on Thursday, underscoring concerns that a slowdown in China may hamper Japan’s trade-reliant economy.

Slowing exports could dash policymakers’ hopes that solid external demand may more than offset weak domestic consumption. Japan’s economy has been expected to emerge from a sharper-than expected contraction in the first quarter.

Data from the Ministry of Finance (MOF) showed Japanese exports rose 5.4% year-on-year in June, smaller than a 6.4% increase expected by economists in a Reuters poll and cooling from 13.5% growth in May.

Japan’s weak yen, which has languished at 38-year lows, boosted the value of exports, but volumes fell 6.2% in June.

“Apart from a weak yen boost, you cannot expect the United States, Europe or China to grow strong enough to back Japan’s exports,” said Takeshi Minami, Chief Economist at Norinchukin Research Institute. “There’s no export growth engine around the world.”

By destination, exports to China by value rose 7.2% year-on-year in June, led by demand for chip-making equipment, the trade data showed, but growth slowed from the 17.8% increase in May.

Shipments to the United States, Japan’s ally and a key market, grew 11% year-on-year in June, while those to the European Union fell 13.4%.

Imports by value grew 3.2% in June from a year earlier, versus a 9.3% increase expected by economists, swinging the trade balance into a surplus of 224 billion yen ($1.44 billion).

It was the first trade surplus in three months. Estimates were for a deficit of 240 billion yen. Imports had risen 9.5% in May.

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