Japan Exports Miss Estimates After Yen Slides to 4-Year Low

Japan’s exports missed estimates in April and the trade deficit swelled, highlighting weakness in global demand that may weigh on efforts to revive the world’s third-biggest economy.

Overseas shipments rose 3.8 percent from a year earlier, the Finance Ministry said in Tokyo today. That was less than the median 5.4 percent estimate of 26 economists surveyed by Bloomberg News. The trade shortfall widened to 879.9 billion yen ($8.6 billion), the most for the month of April since at least 1979, according to the government.

While the yen’s slide to the lowest in four years last week will aid Japanese companies by making their products more competitive in overseas markets, today’s data showed that limited demand in the European Union is constraining exports. The latest numbers also showed the cost of a weak currency, as higher import costs drove a 10th straight trade deficit.

“Exports didn’t regain as much momentum as we expected, even with a weakening yen,” Yuichiro Nagai, an economist at Barclays Plc in Tokyo said. “Japan’s trade balance will be stuck in the red at least until fiscal 2015.”

The Japanese currency was at 102.59 per dollar at 9:49 a.m. in Tokyo after touching 103.31 last week. The Topix Index rose to a 4 1/2-year high. Steelmakers gained 15 percent in the past four trading days, the most among the 33 Topix industry groups after Prime Minister Shinzo Abe vowed to boost infrastructure exports.

Bank of Japan officials are meeting today to set monetary policy, with analysts forecasting that they will stick with a plan for unprecedented easing unveiled in April.

Exports to the European Union fell 3.5 percent from a year earlier, dropping for a 19th month, while those to the U.S. jumped 15 percent. Shipments to China rose 0.3 percent, indicating that demand may be stabilising after past declines.

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