Japan goods exports fall for first time since 2016 as trade war fears mount
TOKYO — Japan’s exports fell in September for the first time since 2016 as shipments to the United States and China declined, likely impeding third quarter economic growth and adding to concerns about the broadening impact of an escalating Sino-US trade war.
The data comes days after a Reuters poll showed a third of Japanese companies — not just exporters — have been affected by the trade conflict between the world’s two biggest economies, and more than half worried about its fallout on their business.
Japanese policy makers also remain wary about the overall economic impact of the international trade frictions. A string of natural disasters that struck Japan has added to the strain on factories, disrupting output and physical distribution.
The US-Sino tariff row has yet to materially hurt trade activity, but a slowdown in external demand has bolstered views that Japan’s economy, the world’s third largest, likely slowed sharply in the July-September quarter.
“The economy probably grew only slightly in the third quarter, led by firm consumption and brisk capex. External demand likely made no contribution,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “Assuming the US-China trade frictions have widespread effects on global trade, Japan’s exports will struggle to grow.”
Mr. Minami said declines in shipments to the United States and China — the two key export destinations for Japan — are a source of concern as each of them accounts for about 20% of Japanese exports, respectively.
Ministry of Finance data out on Thursday showed Japanese exports fell 1.2% in September from a year earlier, against a 1.9% increase expected by economists in a Reuters poll, and followed a 6.6% gain in August. It was the first decline since November 2016. In volume terms, exports fell 4.8% in the year to September, the first drop in seven months.
Japan’s exports to the United States slipped 0.2% in the year to September, dragged down by falling shipments of construction and mining machinery, auto parts and medicines. US-bound auto exports amounted to some 143,000 cars, down 7.0% year-on-year in a snap back from the previous year’s brisk shipments, a sign that car sales have levelled off.
Imports from the United States rose 3.1% in September, led by crude oil, liquefied petroleum gas, helping reduce Japan’s trade surplus with the United States by 4.0% year-on-year to ¥590 billion ($5.24 billion). —