Japan’s Export Slump Drags on Even as Markets Reopen

imageForex19 hours ago (Jul 19, 2020 09:00PM ET)

(C) Reuters. Japan’s Export Slump Drags on Even as Markets Reopen

(Bloomberg) — Japanese exports fell by more than 20% for a third straight month even as key markets started to reopen from virus shutdowns.

The value of Japan’s overall shipments overseas slid 26.2% from a year earlier, the finance ministry reported Monday. Economists forecast a 24.7% fall.

Key Insights

  • Japan’s June trade data suggest that the global economic slump could drag on as rising infection rates in the U.S. and elsewhere hamper efforts to reopen.
  • Japan’s reliance on exports for growth makes its overall recovery prospects precarious. The International Monetary Fund last month cut its outlook for Japan and the rest of the world economy, projecting a deeper recession and slower rebound than it saw just two months earlier.
  • Bank of Japan Governor Haruhiko Kuroda, speaking last week, said he expects Japan’s economy to improve gradually in the second half of the year, but the risks are skewed to the downside.

What Bloomberg’s Economist Says

“Looking ahead, exports are likely to continue to recover in 3Q — depending on the shape of the recoveries in demand in the U.S. and Europe. Imports should also recover at around the same pace, reflecting reduced restrictions on domestic activity.”

–The Asia Economist Team

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  • Exports to the U.S., Japan’s biggest overseas buyer last year, fell 46.6%. Shipments to the EU dropped 28.4%. Those to China slipped just 0.2%.
  • Imports declined 14.4%. Analysts expected a 17.6% drop.
  • The trade balance was a 268.8 billion yen ($2.5 billion) deficit.

(Adds import, trade balance data.)

(C)2020 Bloomberg L.P.

Japan’s Export Slump Drags on Even as Markets Reopen

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