Japan’s exports fell in October for a 13th consecutive month and by more than expected as the strength of the yen and sluggish foreign demand weighed on trade, although current yen weakness could change the outlook.
Ministry of Finance (MOF) data showed on Monday that exports fell 10.3% in the year to October, pulled down by a strong rise in the value of the yen and lower export volumes, much weaker than the expected 8.6% drop and September’s 6.9% decline.
The trade results came on the heels of recent data showing Japan’s economy expanded for a third quarter in July-September as exports recovered and imports fell.
Exports dipped 1.4% in volume terms in the year to October, falling for the first time in three months and following a 4.7% gain in the previous month.
“Overall exports are starting to stall and this month’s results are disappointing,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.
“The data once again shows that global economic recovery isn’t necessarily smooth sailing,” said Kodama, adding that overall economic growth in October-December may stall.
But Marcel Thieliant, senior Japan economist at Capital Economics , took a different view saying that the dramatic fall in the value of the yen since Donald Trump’s election to U.S. president could help turn around Japan’s export performance.
“Looking ahead…we expect it (the yen) to decline further next year, which should lift trade values. We also expect growth among Japan’s main trading partners to pick up marginally, and have pencilled in a 1.5% rebound in export volumes next year,” Thieliant said in a commentary after the trade figures were posted.
Imports in October fell 16.5% versus the median estimate of a 16.3% fall. The trade balance came to a surplus of 496.2 billion yen ($4.47 billion), versus the median estimate for a 615.4 billion yen surplus.
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The value of exports to China fell 9.2% in October from a year earlier, for the eighth straight month, as shipments of communication devices fell.
Shipments to Asia, which account for more than half of Japanese exports, fell 9.9%, marking a 14th month of declines. U.S.-bound exports decreased 11.2%, posting an eighth falling month.
However, a private business survey showed that Japanese manufacturing activity expanded at the fastest pace in nine months in October as output and new export orders picked up.
