In October, Japan’s exports eased the downturn to the slowest pace in close to two years as demand perked up.
According to the country’s Ministry of Finance (MOF), exports dropped by 0.2% year-on-year last month, way better compared to a Reuters’ 4.5% decrease forecast. The reading showed the smallest decline in 23 months and followed the 4.9% fall in September.
Exports to Japan’s biggest trading partner China rose by 10.2% on the back of chip-making equipment, cars, and plastic. To the US, Japan shipped 2.5% more commodities, the second month in a row of a climb. It was the biggest reading since July 2019 and was led by demand for automobiles and car parts.
Shipments to the whole of Asia rose for the first time in eight months by 4.4%. On the other hand, exports to the EU dropped by 2.6%.
Imports went down by 13.3% year-on-year, exceeding expectations for a 9.0% slump, but was better compared to September’s 17.2% fall.
Japan’s trade surplus was driven to JPY873 billion (USD8.38 billion), way beyond the expectations for a JPY250 billion (USD2.4 billion) surplus.
In the third quarter of the year, the country’s economy grew at a record-pace on improved exports and consumption.
However, looking forward, economist Tom Learmouth of Capital Economics Japan estimated that the support from improving exports to Japan’s broader recovery is to be limited as the import volumes also bounced back, even stronger.
