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UPDATE 1-Japan exports fall at fastest in 3 yrs, highlight overseas demand risks
December 17, 2015 / 1:20 AM / 2 years ago

UPDATE 1-Japan exports fall at fastest in 3 yrs, highlight overseas demand risks

(Adds economist's quote, details on exports)
    * Nov exports -3.3 pct yr/yr, biggest drop since Dec 2012
    * China, Asia demand continue to disappoint
    * Doubts over how Fed policy will affect export demand

    By Stanley White
    TOKYO, Dec 17 (Reuters) - Japan's exports in November fell
at the fastest pace in almost three years as shipments to Asia
declined in a worrying sign that weakness in overseas demand
could curb economic growth.
    Japan's gross domestic product is likely to avoid a
contraction for the time being as domestic demand has performed
better than expected, but declining exports highlight the risks
that China's slowdown and turmoil in emerging markets pose to
the outlook.  
    Ministry of Finance data showed on Thursday that exports
fell 3.3 percent in November from a year earlier, more than the
median estimate for a 1.5 percent annual decline in a Reuters
poll. That was the biggest decline since a 5.8 percent
year-on-year fall in December 2012.
    The Bank of Japan is expected to keep monetary policy steady
on Friday following the U.S. Federal Reserve's first interest
rate increase in a decade. Worries about overseas demand could
complicate the BOJ's task next year as it tries to get inflation
to accelerate toward its 2 percent price target.
    "There is still a lot of uncertainty about China," said
Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ
Morgan Stanley Securities. 
    "The risks to exports are pointed to the downside. There are
still a lot of questions about how the Fed's monetary policy
will affect emerging markets."
    Exports to China fell 8.1 percent in November from a year
ago, the biggest decline since February, due to lower shipments
of plastics and electronic parts.
    Shipments to Asia - which account for about a half of
Japan's overall exports - fell 8.7 percent in November, the
biggest decline since July 2012. 
    Exports to the United States, a major buyer of Japanese
products, rose 2.0 percent in November, due to gains in cars and
pesticides, but that was slower than a 6.3 percent year-on-year
increase in October.
    Imports fell 10.2 percent in November versus a year ago,
swinging the trade balance to a deficit of 379.7 billion yen 
($3.10 billion). The median estimate was for an 8.3 percent
annual decline in imports and a 446.2 billion yen trade deficit.
    Some economists speculate the BOJ could ease policy as early
as next month as declining oil prices force the central bank to
cut its consumer price growth forecasts.
     Weak exports are another worry, because they suggest
corporate profits could slow, which could in turn weigh on
workers' wages and capital expenditure.
    There are also concerns that the Fed's rate hike will draw 
money out of emerging markets, which could further undermine
overseas demand. 
($1 = 122.4600 yen)

 (Reporting by Stanley White; Editing by Eric Meijer)

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