TOKYO (REUTERS) - Japan's exports tumbled in July at the fastest pace since the global financial crisis with a resurgent yen and weakness in overseas economies weighing on overseas shipments - a warning that Japan cannot rely on exports to drive growth.
The 14.0 per cent annual decrease in exports in July matched the median estimate in a Reuters poll of economists and was the fastest decline since October 2009.
Economists say there is a growing risk that weakness in exports will persist as global economic uncertainty shows little sign of receding, which could undermine Japanese policymakers'efforts to re-energise the economy.
Exports in July fell due to lower shipments of cars to the United States, ships to Central America and steel to Italy, the data showed on Thursday (Aug 18).
Exports to China - Japan's largest trading partner - fell an annual 12.7 per cent in July, extending the 10.0 per cent decline seen in June.
US-bound shipments fell 11.8 per cent year-on-year, versus a 6.5 per cent annual decline in the previous month.
The yen has risen around 20 per cent versus the dollar so far this yea and further gains would cut deeply into exporters' earnings and increase deflationary pressure by lowering import prices.
The Bank of Japan will conduct a "comprehensive review" of its quantitative easing and negative interest rate policy at its meeting next month after repeatedly pushing back the timing for its 2 per cent inflation target.
Some economists say the BOJ could use the review to ease monetary policy, potentially weakening the yen if bond yields decline further.