Japan exports sink on weaker trade with China, US

Business

In this July 8, 2019, photo, Honda cars, foreground, for export park at Yokohama port, near of Tokyo in Tokyo. Japan’s exports fell 12 percent in August from a year earlier as it logged a second straight month of deficits as the toll from trade tensions between its two largest markets deepened.(AP Photo/Koji Sasahara)

TOKYO (AP) — Japan’s exports fell 8% in August from a year earlier, as trade tensions took a growing toll on demand across the region.

Exports of machinery, vehicles and chemicals all declined, the Finance Ministry reported Wednesday.

Exports totaled 6.1 trillion yen ($56 billion), while imports slipped 12%, the fastest rate in almost three years, to 6.3 trillion yen ($58 billion), suggesting slack demand inside Japan.

Shipments to the U.S. slipped 4.4% in dollar terms, to 1.2 trillion yen ($11 billion), while imports from U.S. dropped 9% to 718.4 billion yen ($6.6 billion). The surplus with the U.S. rose nearly 4%, the report said.

Trade with China took a bigger hit, with exports sinking 12% and imports down more than 8%. Exports to most other Asian countries also fell.

The yen’s growing strength against other currencies was a factor. But overall export volumes fell nearly 6% and import volumes also fell by 6% as trade tensions between the U.S. and China and between Japan and South Korea reverberated across supply chains.

Trade could rebound in coming months, Marcel Thieliant of Capital Economics said in a commentary.

“The big picture, though, is that exports are likely to remain weak over the coming year,” he said.

A government survey of businesses released Wednesday showed sentiment at its worst since the aftermath of the March 2011 earthquake and tsunami which devastated a swathe of Japan’s northeastern coast.

Looming over the outlook is a sales tax hike due to take effect in October that is likely to hit big purchases hardest, Capital Economics said.

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This story has been corrected to show that exports fell 8% year-on-year in August.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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