Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Japan's hot exports growth cools as COVID-19 hits supply chains

EconomySep 16, 2021 06:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A laborer works in a container area at a port in Tokyo, Japan, March 16, 2016. REUTERS/Toru Hanai

By Daniel Leussink and Kantaro Komiya

TOKYO (Reuters) - Japan's exports extended double-digit gains in August, led by strong shipments of chip manufacturing equipment, although the pace of growth weakened as COVID-19 hit key Asian supply chains and slowed factory production.

The trade growth is unlikely to dispel worries about the outlook for Japan's economy, which has not yet recovered to pre-pandemic levels after taking an enormous hit from a collapse in global trade in the first quarter of 2020.

Exports rose 26.2% in August compared with the same month a year earlier, the Ministry of Finance said on Thursday, marking the sixth straight month of double-digit growth as strong demand for chip-making equipment offset slowing U.S and European Union-bound shipments of cars.

However, the growth was slower than the 34.0% expected by economists in a Reuters poll and the 37.0% advance in the previous month.

"Exports have been driving the economy. The recovery scenario for Japan's economy may become shaky if they won't grow," said Takumi Tsunoda, senior economist at Shinkin Central Bank.

Policymakers are under pressure to keep the fragile recovery intact, which has been thrown into doubt due to a resurgence of the pandemic in other parts of Asia, leading manufacturing hubs such as Vietnam and Malaysia to roll out lockdown measures.

"The semiconductor issue had quite a big impact, which weighed on car exports a lot," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"I think it's likely to impact exports at least until the year-end as bottlenecks in parts supply in Southeast Asia continue."

Toyota Motor (NYSE:TM) Corp cut https://www.reuters.com/business/autos-transportation/toyota-cuts-annual-auto-production-target-shortage-chips-parts-2021-09-10 its annual production target by 300,000 vehicles last week as rising COVID-19 infections slowed output at parts factories in Vietnam and Malaysia.

While vaccination rates are improving and daily COVID-19 infections appear to have peaked, analysts expect Japan to see annualised 1.2% growth https://www.reuters.com/world/asia-pacific/japans-q3-growth-forecast-more-than-halved-covid-19-impact-2021-09-14 in the current quarter, much slower than projected last month, a Reuters poll on Tuesday showed.

By destination, shipments to China, Japan's largest trading partner, rose 12.6% year-on-year in August, led by chemicals and semiconductor parts, the data showed.

Exports to the United States, the world's top economy, soared 22.8%, as strong demand for power-generating machines offset a decline in car shipments.

Shipments to Asia as a whole gained 26.1%, their slowest pace in five months, while those to the European Union advanced 29.9% in August.

Imports jumped 44.7% in August compared with the same month a year earlier, versus the median estimate for a 40.0% increase, due to stronger demand for fuel and medical goods.

That brought a trade deficit of 635.4 billion yen ($5.81 billion), the largest shortfall since December 2012 and bigger than the median estimate for a 47.7 billion yen deficit.

The trade data follows the Reuters Tankan poll on Wednesday, which found confidence among Japanese manufacturers fell to a five-month low in September as the latest wave of COVID-19 forced factory halts around Asia.

($1 = 109.4200 yen)

Japan's hot exports growth cools as COVID-19 hits supply chains
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email