Japanese exports drop for 12th month in dismal year for trade

A container being unloaded from an international freighter at a port in Tokyo.
A container being unloaded from an international freighter at a port in Tokyo.PHOTO: AFP

TOKYO (BLOOMBERG) - Japan's exports fell for a 12th consecutive month in September, rounding out a year's worth of poor returns for an economy struggling with a resurgent yen and weak global demand.

Overseas shipments dropped 6.9 per cent in September from a year earlier, the Ministry of Finance said on Monday (Oct 24).

The median estimate of economists surveyed by Bloomberg pointed to a 10.8 per cent decline.

Imports fell 16.3 per cent during the same period, resulting in a trade surplus of 498.3 billion yen (S$6.68 billion).

Prime Minister Shinzo Abe has pledged to expand the economy to 600 trillion yen by 2020, but he's getting little assistance from exports. In fact, net shipments abroad shaved 0.3 percentage point off gross domestic product growth in the second quarter.

The yen has strengthened considerably since the start of the year, gaining 16 per cent, and soft global demand has made matters worse. Weak exports and the strong currency have also made companies more reluctant to invest in domestic production, compounding the difficulty of reviving the economy.

Export and import growth rates should remain "deeply in the red as the stronger exchange rate has reduced the yen-value of shipments", Mr Marcel Thieliant and Mr Mark Williams of Capital Economics wrote in a note before the data release.

Although the yearly numbers are down, Mr Masamichi Adachi of JPMorgan Securities said the month-on-month figures are more important in assessing trends in exports.

Although it's difficult to determine the timing, there will be "some rise of the external demand for Japanese exporters", he said before the data release. "I think there will be some pickup."

Exports to the US fell 8.7 per cent from a year earlier. Those to the EU rose 0.7 per cent.

Exports to China, Japan's largest trading partner, dropped 10.6 per cent.