business

Japan's exports extend double-digit decline

14 Comments
By Daniel Leussink

Japan's exports posted a double-digit slump for a sixth straight month in August as U.S.-bound shipments shrank due to a global demand slowdown from the coronavirus pandemic, casting a shadow over a trade-led recovery from the deep recession.

The export decline highlights the immense task Yoshihide Suga, who is assured to be elected prime minister later on Wednesday, faces in driving an economic recovery.

Total exports fell 14.8% year-on-year in August, a smaller decline than the 16.1% expected by economists in a Reuters poll, official data showed on Wednesday.

That meant exports fell for their 21st straight month, marking the longest run of declines since a 23-month run through July 1987. That followed a 19.2% drop in the previous month.

The decline in August was driven by fewer shipments of cars and mineral fuels, though the pace of contraction eased somewhat from July as economic activity showed signs of picking up.

"Strong demand for ICT technology linked to working from home resulted in exports of electric machinery only falling 5.5% year-on-year," said Tom Learmouth, Japan economist at Capital Economics.

"However, export volumes may not reach pre-virus levels until early-2022," he said in a note.

Suga, who won a ruling Liberal Democratic Party (LDP) leadership election on Monday, will face a huge challenge to get the economy back on track after it posted its worst postwar contraction in the second quarter.

By region, shipments to the United States - Japan's key market - fell 21.3% in the year to August, weighed heavily by declines in engine parts and construction machinery.

Exports to China, Japan's largest trading partner, rose 5.1% year-on-year in August, helped by a sharp increase in shipments of semiconductors, the data showed.

That marked the second straight monthly rise in China-bound shipments, which showed signs of picking up, a finance ministry official said.

Exports to the rest of Asia declined 7.8%, weighed by shrinking exports of iron and steel products.

Overall imports fell 20.8% in the year to August, versus the median estimate for an 18.0% decrease.

As a result, the trade balance came to a surplus of 248.3 billion yen ($2.36 billion), versus the median estimate for a 37.5 billion yen shortfall.

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

14 Comments
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You said it is down to 'global decline' however it is currently impossible to ship from Japan to the USA without using a private courier firm(which have all added fees due to covid). I have clients tearing their hair out wanting products but I cannot supply them. So it's not that straightforward.

9 ( +9 / -0 )

20% import fall, I call that a deep recession !!!

Hoping for soon rebounds.

1 ( +4 / -3 )

This kind of news makes you wonder how much truth is behind the numbers announced from the nations next door like PRC.

0 ( +3 / -3 )

shrank due to a global demand slowdown from the coronavirus pandemic

Is what the 'experts' are saying but

exports fell for their 21st straight month

is what the numbers are saying. I'm not expert but the coronavirus hasn't been around for 21 months, has it?

Abenomics is really working its magic. I'm glad now we will see an upsurge thanks to Suganomics (or Abenomics Light.)

2 ( +2 / -0 )

Impossible to export goods when there are no flights and few ships available, who schedules flights to a country that has a self imposed ban on people travelling. Also, what kind of foreign companies want to do business with Japan? Staff can’t come here, those here finding it impossible to travel. The economic damage from this discriminatory policy is killing many businesses. A survey of German companies in Japan show many are looking at relocating and not investing here as tower can’t do business. Economic self harm.

4 ( +4 / -0 )

I'm wondering why this story is in the "Politics" section. It's clearly business.

Moderator: Fair enough.

1 ( +1 / -0 )

@Triring

According to a report on 11 Sept 2020 by Descartes Datamyne - Goods transported by 20-foot container from China to USA are 1.06 million on August 2020. Increased by 19% as compared with last year.

https://zh.cn.nikkei.com/politicsaeconomy/investtrade/42036-2020-09-11-15-44-15.html

-1 ( +0 / -1 )

This kind of news makes you wonder how much truth is behind the numbers announced from the nations next door like PRC.

According to a report on 11 Sept 2020 by Descartes Datamyne - Goods transported by 20-foot container from China to USA are 1.06 million on August 2020. Increased by 19% as compared with last year.

https://zh.cn.nikkei.com/politicsaeconomy/investtrade/42036-2020-09-11-15-44-15.html

>

-1 ( +0 / -1 )

Are imports bad? No acceptance from many countries by JP post while sending there is fine?

At least 10% tax less for the common good or is it?

1 ( +1 / -0 )

Does Japan want to increase exports?

IMMEDIATELY switch to making medical equipment and PPE. The world wants & high quality "Made In Japan" equipment. The world doesn't trust cheap imitations from a certain communist country.

-1 ( +0 / -1 )

You said it is down to 'global decline' however it is currently impossible to ship from Japan to the USA without using a private courier firm(which have all added fees due to covid). I have clients tearing their hair out wanting products but I cannot supply them. So it's not that straightforward.

Exactly right. Since most commercial flights between the US and Japan are suspended, Japan Post has suspended EMS service to the US. One is stuck using DHL and paying a fortune to ship packages. I have a number of items sitting in a warehouse in Osaka waiting for EMS service to resume. Thankfully the warehouse operator is not imposing their usual 30 day time limit to move shipments through as long as EMS service is suspended.

1 ( +1 / -0 )

Ping AnToday 05:52 pm JST

And how many ships left port towards US compared to last year same month?

Basically it could be an aggregated delivery compiling several months of goods.

0 ( +0 / -0 )

Japan Post told me that due to the dearth of flights between Japan and the UK any parcel I wish to send can wait an average of three weeks, but it can be longer, before it can get on a plane. Just a small example of the massive problem Japan has created for businesses. Can’t blame the airlines, why schedule flights to a country that prevents people from flying.

0 ( +0 / -0 )

Just a small example of the massive problem Japan has created for businesses. Can’t blame the airlines, why schedule flights to a country that prevents people from flying.

How is this Japan;s fault? I honestly don't see it. Japan Post EMS relies on airline flights to move cargo around the world. They buy space in the cargo holds of regularly scheduled flights. If airlines are cancelling flights that leaves fewer flights on which to move cargo. Japan Post has been real good at re-establishing EMS service to nations as airline service resumes but they are pretty much at the mercy of the airlines. Many nations are not allowing flights right now, not just Japan, and for reasons that are perfectly reasonable under the circumstances. Don't be so bitter. It will get better in time. Be patient and understanding.

-1 ( +0 / -1 )

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