Japan’s July export growth misses expectations, volumes fall again By Reuters

TOKYO (Reuters) – Japanese exports grew at a slightly slower pace than expected in July and transport volumes extended their declines, data showed on Wednesday, adding some doubt to the outlook for an economy that has only just begun to recover. accelerate the pace of recovery. .

The result follows separate data last week that showed Japan’s economy rebounded strongly in the second quarter on robust consumption, supporting the case for the central bank to continue its monetary policy tightening campaign.

Japanese exports rose 10.3 percent year-on-year in July, rising for an eighth straight month, Finance Ministry data showed, less than median market forecasts for an 11.4 percent rise. Sales were boosted by a weaker yen and compared with a 5.4 percent rise in June.

However, total shipments fell 5.2 percent last month from a year earlier, the sixth straight month of declines.

Exports to China, Japan’s biggest trading partner, rose 7.2 percent in July from a year earlier on strong demand for chip-making equipment, while those to the United States rose 7.3 %, the data shows.

Imports rose 16.6 percent in July from a year earlier, compared with a 14.9 percent rise expected by economists.

The trade balance was at a deficit of 621.8 billion yen ($4.28 billion), compared with an expected deficit of 330.7 billion yen.

Emerging signs of sustained wage growth and expectations that it would help inflation sustainably reach the Bank of Japan’s 2% target were key drivers behind the BOJ’s recent interest rate hikes.

However, the central bank faces challenges as it moves away from a decade of ultra-loose monetary policy, including pressure on households from rising cost of living.

Politicians’ hopes that the export engine would help prop up the economy have been undermined by uneven demand overseas and softness in the major Chinese market.

Governor Kazuo Ueda said the BOJ would continue to raise rates if the economy and prices move in line with its projection, but last year’s generally fragile recovery and the impact on consumption from the weak yen continued to create uncertainty about the way to normalize politics.

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