Thursday, July 7, 2022

Japan’s Hot Export Growth Cools as COVID-19 Hits Supply Chain

Tokyo-Japan exports rose double-digit in August, led by strong shipments of chip manufacturing equipment, although growth slowed as COVID-19 hit key Asian supply chains and increased factory production. slowed down.

Trade growth is unlikely to address concerns about the outlook for Japan’s economy, which has yet to reach pre-pandemic levels after taking a heavy hit from a collapse in global trade in the first quarter of 2020.

Exports rose 26.2 per cent in August compared to the same month a year ago, the finance ministry said on Thursday, marking the sixth straight month of double-digit growth as strong demand for chip-making devices bolstered US and EU-bound Shipment slowed. of cars.

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

“Exports are driving the economy. If Japan’s economy does not improve, they could become unstable, said Takumi Sunoda, senior economist at Shinkin Central Bank.

Policymakers are under pressure to maintain a fragile recovery, which has been thrown into doubt by a resurgence of the pandemic in other parts of Asia, with major manufacturing hubs such as Vietnam and Malaysia enforcing lockdown measures.

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“The semiconductor issue had a huge impact, which had a huge impact on car exports,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.

“I think this is likely to impact exports at least until the end of the year as parts supply bottlenecks in Southeast Asia continue.”

Toyota Motor Corp. cut its annual production target to 300,000 vehicles last week as rising COVID-19 infections slowed production at parts factories in Vietnam and Malaysia.

While vaccination rates are improving and daily COVID-19 infections peak, analysts expect Japan to see annual 1.2 percent growth in the current quarter, much slower than last month’s estimate, a Reuters report on Tuesday said. The pole showed

By destination, shipments to Japan’s biggest trading partner China grew 12.6 percent year-on-year in August, led by chemicals and semiconductor parts, the data showed.

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Exports to the world’s top economy, the United States, rose 22.8 percent, as strong demand for power-generating machines offset a drop in car shipments.

Shipments to Asia grew 26.1 percent overall, their slowest pace in five months, while the EU grew 29.9 percent in August.

Imports grew by 44.7 per cent in August compared to the same month a year ago, while an average growth of 40.0 per cent was projected due to strong demand for fuel and medical items.

This resulted in a trade deficit of 635.4 billion yen ($5.81 billion), the biggest decrease since December 2012 and larger than the average estimate of 47.7 billion yen deficit.

Trade data follows a Reuters Typon poll on Wednesday in which 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)

By Daniel Lusink and Kantaro Komiya

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This News Originally From – The Epoch Times

Nation World News Desk
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