TOKYO (AP) – Japan’s exports fell 9.2 per cent in October from the year before, the biggest drop in three years as the United States (US)-China trade war and tensions with South Korea bit into demand.
The tariff war between the US and China has taken a toll across Asia, hurting manufacturers and supply chains. Imports slumped nearly 15 per cent, resulting in the country’s first surplus in four months, according to customs data released yesterday.
The weaker trade data reflect lower oil prices but also mounting pressure on the economy from a mainstay of growth at a time when consumers are adjusting to an October 1 sales tax hike.
Exports to the US dipped 11 per cent from a year earlier in the third straight month of declines, with weaker shipments of cars, auto parts and machinery. Imports from the US fell 17 per cent year-on-year, the Finance Ministry said yesterday.Shipments to China, Japan’s biggest export market, dropped 10 per cent. Two-way trade with South Korea in October sank 41 per cent, with both exports and imports falling as relations between the neighbours and US allies languish at their worst level in decades amid antagonisms over longstanding historical issues and disputes over high-tech exports.
Overall, imports totalled JPY6.56 trillion (USD60.5 billion) while exports were JPY6.58 trillion (USD60.6 billion), leaving a trade surplus of JPY17.3 billion (USD159 million).
Analysts said lower export prices exaggerated the decline, but they forecast still weaker demand in coming months. Adjusted for price changes, imports fell only 2.3 per cent in October from the same month a year earlier, Tom Learmouth of Capital Economics said in a commentary.
That “supports our view that domestic demand was relatively resilient following the sales tax hike in October,” he said.
But relatively weak global demand suggest that export volumes will fall further in 2020. Learmouth forecast a 2.7 per cent decline in exports in the coming year after a two per cent drop this year.
On the domestic front, the increase in the sales tax to 10 per cent from eight per cent appears to have had less impact than earlier hikes, economists said.
A downturn in the high-tech industry, especially for computer chip makers, also is thought to have bottomed out, raising hopes for a recovery in that sector.