Japan's exports sink again amid plunging US demand

TOKYO • Japan's exports suffered a double-digit decline for the fourth month in a row in June. United States-bound shipments nearly halved again due to plunging demand for cars and auto parts, while exports to China remained weak.

"Exports are likely to see-saw for the time being," said Mr Takeshi Minami, chief economist at Norinchukin Research Institute, citing a renewed rise in virus cases in Japan and the US.

"If domestic and external demand remain sluggish for a prolonged period, supply capacity could be slashed, triggering a jump in bankruptcies and job losses in the latter half of this fiscal year."

Ministry of Finance data yesterday showed Japan's exports plummeted 26.2 per cent last month from a year earlier. It followed a 28.3 per cent fall in May - the worst downturn since September 2009.

The slump was aggravated by a big annual decline in US-bound car exports, Japan's main export item. Shipments to the US dived 46.6 per cent. Exports to China, Japan's largest trading partner, fell 0.2 per cent in the year to June, as declines in shipments of chipmaking machinery and chemical materials more than offset an increase in non-ferrous metal and car shipments.

Shipments to Asia, which account for more than half of Japanese exports, declined 15.3 per cent, and exports to the European Union fell 28.4 per cent.

REUTERS