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business

Japan's exports slump 26.2% in June

14 Comments

Japan's exports suffered a double-digit decline for the fourth month in a row in June as the coronavirus pandemic took a heavy toll on global demand, reinforcing expectations that the economy has sunk into its deepest recession in decades.

U.S.-bound Japanese shipments nearly halved again due to plunging demand for cars and auto parts, while exports to China remained weak, pointing to the absence of a strong growth engine in the global economy.

Global demand for cars and other durable goods has sunk since March as the pandemic prompted many countries to lockdown, forcing businesses to shut and people to stay at home.

Though more countries have now started re-opening their economies and activity has likely bottomed out, the data could diminish hopes for a quick rebound in global demand and Japan's export-led economy.

Ministry of Finance (MOF) data showed on Monday that Japan's exports plummeted 26.2% in June from a year earlier, bigger than a 24.9% decline seen by economists in a Reuters poll. It followed a 28.3% fall in May -- the worst downturn since September 2009.

The slump was aggravated by a big annual decline in U.S.-bound car exports.

Shipments to the United States - Japan's key market - dived 46.6%, due to 63.3% decline in shipments of automobiles, 56% drop in airplane engines and 58.3% fall in car parts.

Japan is the world's second-largest exporter of autos.

In 2018, the United States was Japan's largest export market, followed closely by China, and led by cars as well as motors, car parts and chip-making machinery.

Exports to China, Japan's largest trading partner, fell 0.2% in the year to June, as declines in shipments of chip-making machinery and chemical materials more than offset increase in nonferrous metal and car shipments.

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

Japan slipped into recession for the first time in 4-1/2 years in the first quarter and is on course for its deepest postwar slump as the health crisis weighs heavily on businesses and consumers.

Reflecting weak demand and declining oil prices, imports fell 14.4% in the year to June, versus the median estimate for a 16.8% decrease, leaving the trade balance in a deficit of 268.8 billion yen ($2.51 billion).

The Bank of Japan has signalled confidence the economy will emerge from the slump and has ruled out the risk of deflation, suggesting the central bank has paused monetary easing after it deployed stimulus twice so far this year.

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

14 Comments
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Japan's exports plummeted 26.2% in June from a year earlier, bigger than a 24.9% decline seen by economists in a Reuters poll. It followed a 28.3% fall in May -- the worst downturn since September 2009.

And yet the Nikkei stock market is still at the same level as last autumn. How???!!

4 ( +5 / -1 )

 And yet the Nikkei stock market is still at the same level as last autumn. How???!!

All that money floating from BOJ so I guess till the presidential elections in the US we are going to rise. If all the banks printing at one then there is no problem.

I wouldn't worry about Japan, we have Shinzo Abe in charge, he knows what to do, quickly he will come with a new plan!

Patience is the key!

-2 ( +3 / -5 )

this need real rate 1USD abt 150JPY...otherwise exports will be frozen...

2 ( +4 / -2 )

The stock prices is like a dog on a leash. It goes a few steps before his owner (the economy) especially if the owner is throwing ball infornt of the dog, or prints loads of money.

It takes time for the owner to pull on the leash and bring the dog closer to himself.

Hence, the stocks are bound to plummet.

Sooner or later.

I'm am waiting for tbat moment.

It's will be time to go shopping.

3 ( +4 / -1 )

And yet the Nikkei stock market is still at the same level as last autumn. How???!!

The Dow Jones is also back to Fall 2019 numbers. Investors, rightly or wrongly, eye a big recovery boom ahead with possible Covid vaccine, which explains stocks in most places ticking along nicely over the last few months. Further, the market is eyeing the big Olympic boost for 2021.

-1 ( +2 / -3 )

exports plummeted 26.2% in June from a year earlier

Ouch!

2 ( +2 / -0 )

Abenomics is a long term strategy.

-1 ( +1 / -2 )

Better start brushing up those resumes and learning to code. Mass redundancies coming to a place near you soon.

4 ( +5 / -1 )

Export (including inbound tourism) is a tiny chunk of Japan's entire GDP. Most goods and services are still produced and consumed by local residents within the country.

-2 ( +1 / -3 )

“this need real rate 1USD abt 150JPY...otherwise exports will be frozen...”

As one of the least export reliant economies of the majors, the yen should, if anything, be appreciating. A return to 80-90 to the dollar by the end of this year is highly doable.

-3 ( +0 / -3 )

A return to 80-90 to the dollar by the end of this year is highly doable.

that'll only be doable if America is printing flat out and Japan stops, doesn't seem likely that either reserve bank will give up on that practice any time soon. I dont see the yen going below 100yen/$ anytime soon

1 ( +1 / -0 )

US unemployment 11.1%

140,000 deaths from coivd 19

The Americans are either broke or dying to buy Japanese made goods. The same goes for Europe. No surprise that Japanese exports fell.

-3 ( +1 / -4 )

Better start brushing up those resumes and learning to code. Mass redundancies coming to a place near you soon.

Computer jobs won't be safe either. Vietnam and India are going to be the prime outsourcing destinations for corporations, and there is a rising development in automation as well. It is better to prepare yourself as an entrepreneur or a business owner.

0 ( +0 / -0 )

Well, with all the products. Please take care to also consume.

0 ( +0 / -0 )

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