Japan’s exports drop for 13th consecutive month

Analysts warn Japan’s economy may be months away from a sure-footed recovery after exports fell for a 13th straight month in December.

The export market was dragged down by US-bound shipments of cars, construction and mining machinery, in a sign weak external demand is limiting the export-reliant economy.

Exports fell 6.3 per cent year-on-year and follows a revised 7.9 per cent year-on-year decline in the previous month, the latest Ministry of Finance (MOF) data shows.

Shipments to the US plunged 14.9 per cent year-on-year in December – a fifth straight month of falls – dragged down by cars, car parts and airplane motor engines.

Bank of Japan policymakers have argued solid domestic demand should help offset weak shipments and manufacturing activity, reports Reuters.

Annual figures show Japan logged a deficit for a second straight year in 2019. The MOF data shows that exports fell 5.6 per cent and imports dropped five per cent compared to the previous year, leaving a deficit of ¥1.6 trillion (NZ$21.7 billion).

“Looking ahead, we think the recovery in exports will be weaker than many expect,” says Tom Learmouth of Capital Economic. “That reflects our view that GDP growth in Japan’s main trading partners will remain subdued this year.”

Japan’s exports of cars and other vehicles fell four per cent, while exports of electrical machinery dropped 6.6 per cent. 

Many economists tip the world’s third largest economy to have shrunk in the final quarter of last year as the US-China trade war hit exports and the October 1 sales tax hike weighed on private consumption.