Japan’s Export Growth Slows in Challenge for Abe: EconomyKeiko Ujikane
Japan’s export growth slowed in September and the nation extended a record run of trade deficits, underscoring the challenge for Prime Minister Shinzo Abe in sustaining momentum in the world’s third-biggest economy.
Shipments increased 11.5 percent from a year earlier, the weakest pace in three months, a finance ministry report showed in Tokyo. That compared with a 14.6 percent gain in August and the 15.6 percent median forecast of 24 economists surveyed by Bloomberg News. Imports climbed 16.5 percent, leaving a trade deficit of 932.1 billion yen ($9.5 billion), an unprecedented 15th straight shortfall in data back to 1979.
Abe needs the economy to go into next year with a head of steam to help withstand the blow to consumption from a sales-tax increase scheduled for April. While the yen’s 12 percent fall against the dollar this year is helping companies from Toyota Motor Corp. to Sony Corp., the weaker currency and nuclear-plant shutdowns are pushing up import costs, especially for energy.
“The decline in export growth partly reflects overseas conditions, with China’s economy likely to slow down,” said Minoru Nogimori, an economist at Nomura Securities Co. in Tokyo. “But the weak yen means the pace of export increases won’t drop so rapidly.”
Japan’s export growth to all major regions slowed, with the weakness concentrated in shipments to the Asian region.
Exports to Asia rose 8.2 percent on year, down from a 13.5 percent gain in August. Shipments to China climbed 11.4 percent after increasing 15.8 percent in August.
Shipments to the U.S. rose 18.8 percent following a 20.6 percent gain in the prior month, while export growth to the European Union eased to 14.3 percent from 18 percent.
Japan’s economy grew an annualized 3.8 percent in the second quarter, and is projected to continue to expand until the three months starting April when the consumption-tax increase takes effect.
The growth outlook is linked to developments in China, the largest overseas market for Japanese companies.
China’s central government called yesterday for “unrelenting” implementation of its economic policies and reform measures to consolidate a recovery from a two-quarter slowdown and improve the quality of growth.
While the economy is “stable and trending for the better,” and the nation has the ability to achieve this year’s targets, the foundations of the rebound are “not yet firm,” the State Council said in a statement after an Oct. 18 meeting led by Premier Li Keqiang.
China’s economic expansion accelerated to 7.8 percent in the third quarter from a year earlier, the statistics bureau said Oct. 18, reversing a slowdown that put the government at risk of missing its 7.5 percent growth target for 2013. The nation’s top leaders will meet next month to map out policies to reform the economy and sustain long-term growth at about 7 percent.
Elsewhere in Asia, Taiwan will report today that export orders rose from a year earlier for a third straight month in September, according to the median estimate in a survey of economists by Bloomberg News. Hong Kong will announce consumer price data for September that are forecast to show inflation fell, a separate survey indicated.
Italy will announce August industrial orders, while the U.S. will report existing home sales fell 3.3 percent in September from the previous month, according to a survey.