Japan’s exports expand faster than expected in November, helped by weaker yen
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The solid data supports the central bank’s plans to gradually raise interest rates from near-zero levels.
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TOKYO – Japan’s exports rose faster than expected in November, data showed on Dec 18, helped by a weaker yen and solid global demand even as businesses worry that protectionist US trade policies will undermine future growth.
Total exports rose 3.8 per cent year on year in November, more than a median market forecast for a 2.8 per cent increase and following a 3.1 per cent rise in October.
Strong chipmaking equipment exports to Taiwan and China, coupled with a weaker yen, boosted the overall value.
But volumes dipped 0.1 per cent, suggesting growth in value largely reflected the boost from the yen’s weakness.
“The results are not as great as they look,” said Mr Koki Akimoto, an economist at the Daiwa Institute of Research.
Looking ahead, exports are likely to stay flat, as strong demand for chipmaking equipment is offset by a moderate US slowdown as well as risks from President-elect Donald Trump’s trade policies, he said.
Exports to China, Japan’s biggest trading partner, rose 4.1 per cent in November from a year earlier, while those to the US were down 8 per cent, the data showed.
Imports dropped 3.8 per cent in November from a year earlier, compared with market forecasts for a 1 per cent increase.
As a result, Japan ran a trade deficit of 117.6 billion yen (S$1.03 billion) in November, compared with the forecast of a deficit of 688.9 billion yen.
The outlook for exports is increasingly uncertain.
Nearly three-quarters of Japanese companies expect Trump’s next term as US president to have a negative impact on their business environment, a Reuters survey showed.
Trump has threatened tariffs in excess of 60 per cent on US imports of Chinese goods, as well as levies of 25 per cent on goods from Canada and Mexico, where several Japanese automakers have factories.
While uneven overseas demand ahead may undercut Japan’s export engine, the Bank of Japan (BOJ) expects a consumption-led recovery to allow the bank to gradually raise interest rates from near-zero levels.
The BOJ announces its policy decision on Dec 19.
Sources have told Reuters that the central bank is leaning towards keeping interest rates steady this week as policymakers prefer to spend more time scrutinising overseas risks. REUTERS
