The surplus came to 299.8 billion yen (S$435 billion), bigger than a surplus of some 214 billion yen markets had expected. It was the fourth straight month that exports exceeded imports. -- PHOTO: AP
TOKYO - JAPAN'S exports continued to tumble in May, with even shipments to China showing little sign of improvement, suggesting that hopes for a quick recovery in global demand may be premature.
Expectations are growing that export-driven Japan may already be out of recession technically, with the economy seen growing 0.4 per cent in April-June after four straight quarters of contraction through January-March.
The Bank of Japan's tankan business survey due out on July 1 is expected to show a rebound in the mood among big Japanese manufacturers.
Although exports are now falling less after a period of paralysis in the wake of the financial crisis, there has been little recovery in global demand for cars while consumer electronics demand also remains weak.
Overall, Japanese exports fell 40.9 per cent in May from a year earlier, more than the median market forecast for a 39.1 per cent fall. On a seasonally adjusted basis, exports fell 0.3 per cent in May from April.
Stocks have been climbing in recent months on growing hopes that global economy may be on the road to recovery after the worst turmoil in decades, but they have recently been giving back some of those gains. The Nikkei jumped 45 per cent from a March low to 10,170.82 earlier this month, but has slipped back to 9,552.40 as of mid-morning on Wednesday.
Japan's shipments to China, one of the most vibrant economies in the world at the moment, fell 29.7 per cent in May from the same month a year earlier, even faster than the 25.9 per cent fall logged in April.
Still, the bigger fall in exports is primarily due to a rise in the yen as exports volume fell 36.0 per cent in May, little changed from 35.9 per cent in April.
The pace of annual falls in exports has slowed after a 49.4 per cent tumble from a year earlier in February, as companies have worked down their inventories, and some analysts said the data showed a continued recovery in exports.
Hopes for a rebound in exports has prompted Japanese manufacturers to scale back sharp production cuts, alleviating pessimism over the economy.
Japanese industrial production jumped at its fastest rate in more than half a century in April. --REUTERS
