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Japan's exports, imports fall due to pandemic

12 Comments
By YURI KAGEYAMA

Recession-hit Japan's exports plunged nearly 22% in April, marking their worst drop in more than a decade, as the coronavirus pandemic slammed global demand for autos, machinery and chemicals.

Imports fell 7% from a year earlier, according to Finance Ministry data released Thursday.

The drop in exports was the worst since October 2009 - amid the fallout from the global financial crisis - as export-dependent Japan struggles to juggle the health risks of COVID-19 with the dire need to keep the economy going.

Exports to regions most badly affected by the pandemic took the biggest hits.

Shipments to the U.S. plunged 38%, while imports rose 1.6%, causing the politically contentious trade surplus to decline by 75% from a year earlier, to 181 billion yen ($1.7 billion).

Japan's exports to the European Union tumbled 28% in April, while imports from the region declined 7%.

Trade with China, which was the early epicenter of the virus outbreak and is now reviving its economy, was less affected. Exports slipped 4% and imports from China jumped 12% year-on-year.

Overall, exports totaled 5.2 trillion yen ($48 billion), down from nearly 6.7 trillion yen in the same month in 2019. Imports dropped to 6.1 trillion yen ($57 billion) from 6.6 trillion yen.

By sector, exports of vehicles, machinery, chemicals and textiles fell most sharply.

Automakers, like Toyota Motor Corp. and Honda Motor Co., which form a pillar of the economy, have reported nose-diving profits as sales shrink around the world and plants in some parts of the world stop production.

"The drop in auto exports, reflecting the lockdowns in Europe and the U.S., is really working to drag down the numbers," said SMBC Nikko Securities chief economist Junichi Makino, noting electronics exports had held up better.

Japan's exports may start recovering after hitting bottom in the April-June quarter, though much depends on whether the pandemic can be curbed, he said.

Japan is in a technical recession after a contraction that began in the last quarter of last year deepened in January-March. Analysts say worse may lie ahead.

Like many other nations, Japan has asked people to work from home and do social distancing to curb the virus' spread. Restrictions were eased this month in regions with few or no new infections, though they remain in place for Tokyo and some areas.

Tourism and travel have dwindled. Restaurants are closed or allowing only takeouts, and those that have stayed open are seeing fewer customers.

Even before, the world's third-largest economy barely eked out growth over some periods. The recent trade conflict between China and the U.S. has also hurt Japan.

© 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

©2020 GPlusMedia Inc.

12 Comments
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wasting $435,000,000 on tiny ineffective cloth marks also helped!

sigh....

2 ( +6 / -4 )

I believe this is just the beginning.

If China insist on not collaborating with US demands for economy recovery (and seems they will not), the world is headed towards yet another cold war.

7 ( +7 / -0 )

For a heavily export country, Japan is definitely doomed in the long run with declining populations and heavy competition from China, Vietnam, South Korea and India. The path towards a service-based and heavy tourist economy was inevitable until the Pandemic ruined the Olympics. Shinzo Abe's golden plan of transition was ruined.

Unfortunately, the only solution that may save Japan's economic relevance on the world stage is probably selling off Japanese assets for Western investors. Especially, real estates, big Keiretsus and business/patent rights. Abe and Aso have been luring foreigners to buy Japanese assets since the 2008 Recession. The goal has been quite stagnant because of the Ghosn fiasco and other corporate scandals (Takata or Olympus) that put a question mark on the profitability and integrity of Japanese assets. Most foreign investors initially refused to buy Japanese assets during 1990s crash because these assets are junk. Today, J-govt faces the similar problem as they can't find any buyer for their zombie companies. Years of QE and bonds buying rapidly diminish the values and profitability of these companies, thanks to BoJ. However, I believe their goals of selling Japan economy for highest Western bidders will prove successful.

If Japanese oyajis enjoy staying at one of American-run retirement centers that have been cut down to lowest qualities to rack highest profits. Or a healthcare system that has been privatized with American style (The UK is going to lose NHS as American healthcare firms stride towards privatization).

-5 ( +2 / -7 )

For a heavily export country, Japan is definitely doomed in the long run with declining populations and heavy competition from China, Vietnam, South Korea and India. The path towards a service-based and heavy tourist economy was inevitable until the Pandemic ruined the Olympics. Shinzo Abe's golden plan of transition was ruined.

Another misinformed soul I see.

Japan's reliance on export is only 25% of the GDP.

2 ( +7 / -5 )

"export-dependent Japan"

Here we go again, this oft recycled myth of Japan’s supposed dependence on exports. In fact, Japan is among the LEAST export dependent economies. See here:

https://en.m.wikipedia.org/wiki/List_of_countries_by_exports

This insistence on playing fast and loose with the facts is designed to deflect peoples’ attention from the unsustainable nature of Japan’s obscene bloated trade surpluses, much of which is derived from the proceeds of an single industry (automobiles) skewed in Japan’s favour by import restricting measures too numerous to mention. The trade surplus is one mechanism among many that helps to buttress the many, hopelessly inefficient, parts of the economy that have always been shielded from having to make adaptations in the manner that other countries with much freer and open trade have. This is a golden opportunity to make clear to our Japanese friends that without reciprocity, their days of exploiting Western openness in order to crank up huge trade surpluses and take full advantage of global investment opportunities are over.

6 ( +7 / -1 )

Gee, who would of thought!

0 ( +1 / -1 )

shocking news.........smh

-1 ( +1 / -2 )

This is te new norm. I said to down the yen more than 5 times. While exports are important for japanese manufacturers. Imports on the other hand is not important, most japanese like buying local.

0 ( +5 / -5 )

Triring

Another misinformed soul I see.

Japan's reliance on export is only 25% of the GDP.

The export must be less than 25% of GDP, at somewhere around 10-12 %. On the entire international trade (import/export), it amounts to 20-25%.

But, you've got to the point; Japan doesn't rely heavily on international trade. The country's economy is domestically driven as most goods and services are both produced and consumed at home.

0 ( +0 / -0 )

Japan's reliance on export is only 25% of the GDP.

Because of the self-induced deflation to keep Japan relevant on the international stages. 20th century Japan was pretty much like the current prosperous South Korea. The declining standard of living in Japan coincided with their economic withdrawal from the world. One can see it a mile away.

Here we go again, this oft recycled myth of Japan’s supposed dependence on exports. In fact, Japan is among the LEAST export dependent economies.

Not a good thing, either. You export more to acquire more USDs in your pockets. I am talking this on the individual level. Have you seen any Japanese tourist buying luxurious goods on the level of the Chinese?

In fact, Japanese people with the most powerful passports in the world barely traveled outside the country.

0 ( +0 / -0 )

The World is too dependent upon China for many things.

Each Country should see this as an opportunity to decide upon its own future, and argue that to the WTO.

The WTO now needs to see Pandemics as a huge issue issue, and ideally start by isolating the source of those, by excluding the CCP/China from all agreements, bringing in "Taiwan" in their place ... that should, I hope piss off the Chinese big time, and reward Taiwan for their well deserved efforts.

Go Fuk the CCP!

-1 ( +1 / -2 )

Japan needs to be more independent, just like other Countries need to be.

Produce their own key products, so that they can survive in Isolation from others.

What's been done with the prior Globalization trend, was to hand over the keys to another Country to run with.... topically China, and sadly China is controlled by the badly run Government calling themselves the "CCP" which also dictates the way business works within their Country - so, as the Aussies found out recently, if you piss of the Chinese CCP, they slap import duties upon you to make you pay, and you have to come begging back to them for forgiveness... and negotiate a new deal... this has to end.

-1 ( +0 / -1 )

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