Japan exports dragged down by falling Asia shipments

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Japanese exports posted their fourth consecutive fall in March, driven by lower shipments to Asian countries, highlighting the country’s recent weak export performance amid a wider economic slowdown. 

The year-on-year drop of 2.4 per cent in exports, according to Ministry of Finance figures, was steeper than last month’s 1.2 per cent decline, but came in slightly above a Reuters poll forecasting a 2.7 per cent fall .

While exports to North America and Western Europe rose 3.2 per cent and 1.8 per cent respectively, this was more than offset by a 5.5 per cent contraction in outbound shipments to Asian countries. China, Indonesia and Malaysia saw the steepest falls. 

The Bank of Japan had noted export weakness in its last monetary policy meeting in March, as it opted to keep rates on hold. 

Imports posted a rise of 1.1 per cent year on year, missing analyst forecasts of a 2.6 per cent gain, but rebounding from February’s steeper drop of 6.7 per cent. 

As a result, the trade surplus for March stood at ¥528.5bn ($4.71bn), down 32.6 per cent year on year. 

“The recent rebound in new export orders in the manufacturing PMI and the uptick in the export climate index suggest that the worst may be over,” said Marcel Thieliant, economist at Capital Economics. “Even so, a marked rebound in export growth is not on the cards as we expect GDP growth in Japan’s main trading partners to slow from 3.2% in the fourth quarter to 2.4% this year.”

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