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Japan export growth dips as Chinese demand slows

TOKYO — Japan’s exports rose last month from April a year earlier, led by car shipments to the United States, but the pace of growth slowed from March in a worrying portent for external demand as a slowdown in China clouds the outlook for Asia’s second-largest economy.

A Toyota plant in Aichi prefecture. Japanese exports to 

the United States rose 21.4 per cent in the year to April, 

with brisk shipments of cars and vehicle engines. Photo: Bloomberg

A Toyota plant in Aichi prefecture. Japanese exports to

the United States rose 21.4 per cent in the year to April,

with brisk shipments of cars and vehicle engines. Photo: Bloomberg

TOKYO — Japan’s exports rose last month from April a year earlier, led by car shipments to the United States, but the pace of growth slowed from March in a worrying portent for external demand as a slowdown in China clouds the outlook for Asia’s second-largest economy.

Exports grew 8 per cent year-on-year to ¥6.55 trillion (S$72 billion) last month, Japanese Ministry of Finance data released yesterday showed, slowing from an 8.5 per cent gain in March. Compared with March, shipments fell 1.5 per cent last month.

Nonetheless, the performance beat the 6.4 per cent gain forecast by economists in a Reuters poll and helped lift Japanese stocks, especially after the yen weakened against the greenback yesterday following comments last Friday by US Federal Reserve chair Janet Yellen that she expected to raise interest rates this year.

The Nikkei-225 stock index rose 0.7 per cent to close at a fresh 15-year high of 20,413.77, as the yen eased 0.1 per cent to 121.65 versus the US dollar. The stock benchmark has gained 4.3 per cent over the past seven days, the longest winning streak since last December.

The slowdown in export growth could hold back the Japanese recovery from last year’s recession, after data last week that showed the economy posted two straight quarters of moderate expansion. Policymakers count on exports as a key driver of corporate activity, which could help boost wages and spur consumer spending to generate a virtuous growth cycle needed to shake off years of deflation.

“The figures were not so bad as we thought, but shipments to China and the rest of Asia turned out weak, which is worrying for the outlook for Japan’s external demand,” said Mr Hidenobu Tokuda, an economist at Mizuho Research Institute.

Shipments to China, Japan’s largest trading partner, rose 2.4 per cent, slowing from a 3.9 per cent gain in March, the data showed. China-bound car exports halved in the year to April.

Exports to Asia, which account for more than half of Japan’s shipments, grew 6 per cent, slowing from a 6.7 per cent gain in March. Mr Tokuda said the slowdown probably reflected weakness in Thailand and other Association of South-east Asian economies.

Exports to the US rose 21.4 per cent in the year to April, keeping the pace of gains in the previous month with brisk shipments of cars and vehicle engines.

Overall imports fell 4.2 per cent to ¥6.6 trillion in April, a fourth straight month of year-on-year declines, mainly because of the sharp fall in global oil prices. The fall was much deeper than the median estimate for a 1.5 per cent drop.

The Japanese trade balance swung into a deficit of ¥53.4 billion, much smaller than the median estimate for a ¥318.9 billion deficit, after posting the first trade surplus in nearly three years in March. AGENCIES

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