Japan's exports fall for the first time in ten months – as demand from China and the US falls

TOKYO (Reuters) – Japanese exports fell for the first time in 10 months in September due to lower demand from China and a slowdown in the U.S. economy.

Exports fell by 1.7 percent compared to the same month last year, the finance ministry announced on Thursday. Analysts polled by Reuters had expected an average of 0.5 percent, after a revision of 5.5 percent in August. The latest data worries policymakers because continued weakness in global demand could make it harder for the central bank to exit its years of ultra-loose monetary policy.

Exports to China, Japan's biggest trading partner, fell 7.3 percent in September. Low demand in the automotive sector led to a decline in exports in both countries. In addition, the recent appreciation of the yen, due to the unexpected interest rate hike by the Bank of Japan (BoJ) at the end of July, weighed on the value of exports. “Exports are likely to come under further pressure in the coming months, especially given the uncertainties surrounding the Chinese economy,” said Kazuma Kishikawa of the Daiwa Institute of Research.

Imports rose 2.1 percent year-on-year in September, after 3.2 percent in the previous month. Experts had expected a 3.2 percent increase. The trade balance showed a deficit of 294.3 billion yen (1.81 billion euros). Analysts had expected a loss of just 237.6 billion yen.

The BoJ is expected to leave interest rates unchanged at its meeting on October 30 and 31 and keep its inflation forecast close to 2 percent until March 2027.

(Reporting by Makiko Yamazaki, written by Katarina Losche. If you have any questions, please contact our editorial team at [email protected] (for politics and economics) or [email protected] (for companies and markets. .)