Japan's exports fell for the first time in ten months

Exports to China fell by 7.3 percent in September and to the United States by 2.4 percent. Politicians are concerned about the developments.

Japanese exports fell in September for the first time in ten months due to weak demand from China and an economic slowdown in the United States. Exports decreased by 1.7 percent compared to the same month last year, the Ministry of Finance announced on Thursday. Analysts polled by Reuters had expected, on average, an increase of 0.5 percent after a revised increase of 5.5 percent in August.

The latest data raises concerns for policymakers, as continued weakness in global demand may make it difficult for the central bank to exit its ultra-loose monetary policy for years.

Exports to China decreased by 7.3 percent

Exports to China, Japan's largest trading partner, fell 7.3 percent year-on-year in September, while exports to the United States fell 2.4 percent. Weak demand in the automobile sector led to a decline in exports in both countries. In addition, the recent rise in the value of the yen, partly due to an unexpected interest rate hike by the Bank of Japan (BoJ) at the end of July, affected the value of exports. “Exports are likely to come under further pressure in the coming months given the uncertainty, especially regarding the Chinese economy,” said Kazuma Kishikawa of the Daiwa Research Institute.

In September, imports rose by 2.1 percent year-on-year, after 3.2 percent in the previous month. Experts had expected an increase of 3.2 percent. The trade balance showed a deficit of 294.3 billion yen (1.81 billion euros). Analysts had expected a loss of only 237.6 billion yen. The Bank of Japan is expected to leave interest rates unchanged at its meeting on October 30-31, and to broadly maintain its inflation forecast near 2% until March 2027. (APA/Reuters)