Last month, Japan’s exports decreased by 0.8% from the same period the previous year, with sharp drops in shipments to China and the rest of Asia, the country’s biggest regional market.
According to preliminary figures issued by the Japanese Finance Ministry on Wednesday, imports fell by about 18%. According to the report, this resulted in a trade imbalance of 930.5 billion yen ($6.3 billion) in August, the second consecutive month of losses.
While imports decreased by roughly 13%, exports to Asian markets decreased by 8.8%. A significant portion of that was an 11% decline in the value of shipments to China, whose economy has stagnated recently as a hoped-for recovery from COVID-19 pandemic-related disruptions fizzled.
“We think the weak recovery in China will continue to have a negative impact on exports for a while, but semiconductors seem like they are bottoming out from the down cycle,” Robert Carnell, regional head of research for Asia-Pacific at ING, wrote in a study.
He claimed that this quarter’s economic growth would not be as great as the quarter from April to July.
Japan’s exports to the United States increased 5.1%, boosted by a strong market for automobiles. Exports to the European Union increased 12.7% over the previous year.
Total vehicle exports increased 40.9% year over year, and semiconductor exports increased 8.1%. Exports of machinery fell 9.6%, and exports of chemicals fell 11.7%.
On August 24, China declared that it was stopping all imports of seafood from Japan after treated radioactive water from the destroyed Fukushima Dai-ichi nuclear facility in northern Japan started to leak into the Pacific Ocean.
Despite a 41% decrease from a year earlier, Japan’s overall food exports to China represented only 1% of the total. This may have some effect on imports from Japan in September and beyond.
Japan’s exports have been affected by China’s less robust than anticipated recovery, but there are rising signs that the downturn may be bottoming out, at least for some industries.