fbpx

Type to search

Japan Posts Third Straight Monthly Trade Deficit

Core machinery orders in the world’s third-largest economy were virtually flat in September and followed a 2.4% decline in August


Shipping containers are seen at a port in Tokyo. Photo: Reuters

 

Japan posted a goods trade deficit of 674 billion yen ($5.9 billion) in October, up from 624 billion yen in September, the Finance Ministry said on Wednesday, as exports rose 9.4% from a year earlier and imports increased 26.7%.

The country remained in the red for a third consecutive month. 

Exports to Taiwan and India rose by 24%, while those to China by 9.5%. Imports from China rose 11.4%, while those from Taiwan increased 32.2% and from Hong Kong by 63.6 %.

“The recovery in exports in October suggests that supply shortages were beginning to ease in the hard-hit automobile sector,” said Tom Learmouth, Japan economist at Capital Economics in Singapore.

“We think that the rebound in exports will pick up pace over the coming months as production at Japanese carmakers returns to normal,” he added

Machinery accounted for 20% of exports, the largest sector.

Japan’s core machinery orders were virtually flat in September from the previous month. Orders totalled 838.9 billion yen ($7.3 billion) and followed a 2.4% decline in August, according to the Cabinet Office. The data exclude those for ships and utilities due to volatility.

Machinery orders are seen as a leading indicator of corporate capital spending. “Looking ahead, we expect core machinery orders to pick up gradually,” Kazuma Maeda, an analyst at Barclays in Tokyo, said.

According to the September Tankan survey, companies were projecting a strong capex increase of 10% in fiscal 2021 following a 8.6% contraction in. 2020.

“Although the manufacturing sector can be expected to see some investment to reduce carbon emissions in such areas as electric vehicles and energy-saving technology, investment in the non-manufacturing sector could gradually recover with economic normalisation, especially in transport and face-to-face service industries,” Maeda said.

 

• George Russell

 

 

READ MORE:

Japan Says Chips Boost Key To Post-Pandemic Stimulus Push

Kishida Pledges $10bn for Climate: Japan Times

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.