Japan exports tumble most in three years as China downturn bites
TOKYO: Japan’s exports fell the most in more than three years in December from a year earlier, stoking fears of economic contraction in the final quarter of 2015 as a slowdown in China and emerging markets takes its toll on the export-reliant economy.
Ministry of Finance data on Monday showed exports fell 8.0 percent in the year to December, down for the third straight month, marking the biggest drop since September 2012. An annual decline of 6.8 percent was expected by economists in a Reuters poll.
Such weak data should keep the Bank of Japan under pressure to act as early as at its Jan. 28-29 review, as the collapse in oil prices weighs on inflation expectations while worries over a China-led global slowdown and a stock market rout sap business morale.
The central bank is expected to cut its inflation projection for the fiscal year from April to possibly below 1 percent this week – far below its 2 percent target – with the outcome of the two-day policy review seen hanging in the balance.
“Given declines in imports, domestic demand is likely to have slumped and thus chances are high that the economy suffered a contraction in October-December,” said Koya Miyamae, senior economist at SMBC Nikko Securities. On a seasonally-adjusted basis, exports fell 3.8 percent in December from the previous month, the data showed.
Exports to China, Japan’s biggest trading partner, fell 8.6 percent in December from a year earlier, down for a fifth straight month, dragged down by shipments of chemicals and electronics parts. Shipments to Asia, which accounts for more than half of Japan’s exports, declined 10.3 percent in the year to December.
Exports to the United States, another key market for Japanese goods, fell 3.4 percent year-on-year in December, led by shipments of mining machines and steel and metal processing machinery.