Japan's export growth slows in July, casting doubt on economic recovery

(MENAFN) Japan's export growth in July was slower than anticipated, raising concerns about the stability of an economy that has recently shown signs of rapid recovery, according to official data. This slowdown in export growth follows last week's report of a robust economic rebound in the second quarter, driven by strong consumer spending, which had strengthened arguments for the Bank of Japan to maintain its monetary tightening policies. However, the latest figures suggest that the recovery may not be as steady as previously thought.

In July, Japan's exports increased by 10.3 percent year-on-year, marking the eighth consecutive month of growth, according to the Finance Ministry. This figure, though positive, fell short of the median market forecast of an 11.4 percent rise. The growth was supported by a weaker yen, which had also contributed to a 5.4 percent gain in June. Despite this, the overall volume of shipments decreased by 5.2 percent compared to the same month last year, marking the sixth consecutive month of decline in shipment volumes. This decline raises questions about the sustainability of the current export growth, especially in light of the ongoing global economic uncertainties.

Japan's trade relationship with its largest trading partner, China, saw a 7.2 percent increase in exports in July, driven by strong demand for chipmaking equipment. Similarly, exports to the United States rose by 7.3 percent, reflecting steady demand in one of Japan's key markets. On the other hand, imports surged by 16.6 percent in July compared to the same period last year, surpassing economists' forecasts of a 14.9 percent increase. This significant rise in imports contributed to a trade deficit of 621.8 billion yen (USD4.28 billion), which was nearly double the expected deficit of 330.7 billion yen. These figures highlight the challenges Japan faces as it navigates its economic recovery, balancing the pressures of global demand with domestic economic policies.

MENAFN21082024000045015682ID1108584789