TOKYO – Japan’s exports dropped by the most since February 2021 in September, sapping momentum from the country’s economic recovery as global demand weakened.
Exports declined 1.7 per cent from a year ago led by cars, mineral fuels and construction machinery, and slipping to negative growth for the first time since November 2023, the Ministry of Finance reported on Oct 17. The reading missed economists’ forecast of a 0.9 per cent gain.
Imports rose 2.1 per cent, led by electronic calculators and semiconductor parts, and slightly missing the consensus estimate of a 2.8 per cent gain, while the trade deficit narrowed to 294.3 billion yen (S$2.6 billion).
The Oct 17 data indicates that Japan’s economy likely received limited support from external demand in the third quarter amid a global slowdown. Japan’s economy expanded in the three months through June, partly driven by a rise in private consumption, though the growth also appeared to be a temporary rebound after a deep contraction in the prior period.
“It’s a weak result,” said senior economist Yayoi Sakanaka from Mizuho Research & Technologies, adding that net exports will likely be a drag on the third quarter.
“Looking ahead, though the yen is slightly weaker again, I don’t think it will be a tailwind for exporters”, given that other stronger factors are at play, such as China’s strengthening of its own exports which will likely muscle out Japanese shipments.
The weaker exports reflect sluggish global growth amid growing uncertainty about the outlook in major economies.
Shipments to China sank 7.3 per cent, reversing gains of 5.2 per cent the month before, while those to the United States and Europe fell 2.4 per cent and 9 per cent, respectively.
The World Trade Organisation recently suggested that global goods trade in 2025 will grow less than initially forecast, as rising instability weighs on
