Japan’s export growth slowed in July, a sign that foreign demand is failing to provide much support to the world’s third-biggest economy.
Shipment values increased 7.6 percent from a year earlier, slowing down from a 9.5 percent gain in June, the Ministry of Finance said on Wednesday. The volume of exports slipped 0.7 percent.
Japan’s economy is struggling to emerge from a contraction last quarter driven by weak consumption and the biggest tumble in exports in four years. A slowdown in China is taking a toll, with export volumes to Japan’s biggest trading partner falling for a sixth month on weaker demand for cars.
“There’s no sign of a pickup in exports,” said Atsushi Takeda, an economist at Itochu Corp. “The economy may rebound in July-September as consumption and capital spending may recover, but the recovery may lack strength because exports are looking sluggish.”
The yen was little changed, trading at 124.38 per dollar at 9:22 a.m. in Tokyo.
Japan’s Vice Economy Minister Yasutoshi Nishimura said in an interview on Monday the economy is already being affected by slowing Chinese growth, citing the fall in exports of electronic parts and machine tools.
Economists surveyed by Bloomberg had forecast exports had risen 5.2 percent in July. Imports slid 3.2 percent, leaving a deficit of 268.1 billion yen ($2.2 billion).
Calls are emerging for Prime Minister Shinzo Abe to step up fiscal stimulus after two quarters of growth fizzled with last quarter’s 1.6 percent annualized drop in gross domestic product. Weak exports combined with cutbacks in spending by consumers and businesses were the main reasons for the contraction, according to data released on Monday.
Japan needs an economic injection of as much as 3.5 trillion yen, Etsuro Honda, an economic adviser to Prime Minister Shinzo Abe, said on Tuesday.