By Makiko Yamazaki
TOKYO (Multibagger) - Japan's exports grew at a slower rate than expected in August, with shipment volumes continuing to decline, indicating the impact of slowing global demand on the fragile economic recovery. Japan's focus on sustainable growth is facing challenges from external risks such as a potential U.S. slowdown and a weak Chinese economy.
In August, total exports increased by 5.6% year-on-year, falling short of the market forecast of 10% growth. Shipment volumes also dropped by 2.7% compared to the same period last year, marking the seventh consecutive month of decline.
While exports to China saw a 5.2% increase, exports to the United States were down by 0.7%. Import growth was lower than expected at 2.3% year-on-year, resulting in a trade deficit of 695.3 billion yen.
Despite a rebound in the economy driven by personal consumption in the second quarter, concerns about economic fragility remain. Business confidence among Japanese manufacturers hit a seven-month low in September, attributed to soft demand from China.
The Bank of Japan is likely to maintain its current monetary policy at an upcoming meeting, but may indicate future interest rate hikes and highlight progress in sustaining inflation around the 2% target.
Analysis:
- Japan's exports grew at a slower pace in August, reflecting global economic concerns and the impact of weakening demand.
- The decline in shipment volumes for the seventh consecutive month highlights the challenges faced by Japan's economy.
- Despite a positive rebound in the second quarter, ongoing fragility and concerns about soft demand from China are affecting business confidence.
- The Bank of Japan is expected to maintain current policies but may signal future rate hikes to support inflation targets.