×

Japan May exports rise on boost from weak yen

By Thomson Reuters Jun 18, 2024 | 7:38 PM

By Tetsushi Kajimoto and Makiko Yamazaki

TOKYO (Reuters) – Japanese exports rose sharply in May driven by U.S.-bound shipments of cars and China-bound chip-making machinery as the weak yen helps make its goods more competitive.

Shipments rose 13.5% year-on-year in value terms in May, data from the Ministry of Finance (MOF) showed on Wednesday, versus a 13.0% increase seen by analysts in a Reuters poll and an 8.3% gain in April.

Imports grew 9.5%, compared with expectations for a 10.4% rise and April’s 8.3% increase.

That left the trade balance at a deficit of 1.22 trillion yen, compared with an average analyst estimate of 1.31 trillion yen in deficit.

In terms of volumes, however, exports struggled to pick up, reflecting slowing global demand.

Export volume fell 0.9% year-on-year in May.

Weakening demand could cloud policymakers’ hopes that exports will offset tepid domestic consumption.

The trade data came on the heels of Reuters Tankan that showed confidence among big manufacturers fell in June. The batch of data underscores the uneven nature of economic recovery.

By destination, exports to China rose 17.8% year-on-year in May, led by demand for chip-making machinery, the trade data showed.

U.S.-bound shipments, Japan’s ally and key market, grew 23.9% year-on-year in May due to car exports, while those to European Union fell 10.1%.

The trade data followed the Bank of Japan’s decision last week to reduce its huge bond purchases with a detailed plan to be unveiled next month, taking a step forward towards rolling back more than a decade of its stimulus programme.

Still, uncertainty over the fragile economy could make future interest rate hikes far from assured.

($1 = 156.2200 yen)

(Reporting by Tetsushi Kajimoto; Editing by Shri Navaratnam)