Japan’s exports pick up on weak yen but business mood stalls

By Thomson Reuters May 21, 2024 | 7:42 PM

By Tetsushi Kajimoto

TOKYO (Reuters) – Japan’s exports rose for a fifth straight month in April, helped by a boost in value from the weak yen, government data showed on Wednesday, but shipment volumes struggled as soft external demand weighed on growth.

Policymakers are counting on exports to offset weak domestic consumption. However, export volumes have remained soft with Japan’s biggest trading partner China struggling to stage a convincing economic recovery.

The trade data comes as Japan seeks to drive sustainable growth underpinned by higher wages and durable inflation, seen as prerequisites for the central bank to shift away from near-zero interest rates.

Ministry of Finance data out on Wednesday showed Japan’s exports rose 8.3% in April from a year earlier, undershooting an 11.1% gain expected by analysts in a Reuters poll. It accelerated from a 7.3% gain in March.

Imports also rose 8.3% in the year to April, roughly matching economists’ estimate and swinging from a 5.1% decrease in March.

As a result, the trade balance came to a deficit 462.5 billion yen ($2.96 billion) in April, swinging from a 387 billion yen surplus in March.

The trade statistics come a week after data showed Japan’s economy contracted 2% in the first quarter, with exports of goods and services tanking 5%, leaving the economy without a growth engine.

Separately, Japanese business morale held steady in May, but manufacturers and service-sector firms complained that inflationary pressures driven by the weak yen were squeezing profit margins, a Reuters monthly survey showed on Wednesday.

($1 = 156.1900 yen)

(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes)