Japan trade gap widens as imports surge, capex seen solid


Article content

TOKYO — Japan’s exports jumped to a record

amount in July, boosted by global fuel inflation and a weak

yen, outweighing exports and deepening trade deficits, in a sign

of a further worsening in the terms of trade for the

export-oriented economy.

The trade data came on the heels of Reuters Tankan, which

showed improvement in Japan’s business sentiment in August,

while the key gauge of corporate capital spending rebounded in

June from the previous month’s decline.

The batch of data may help ease calls for more stimulus to

Advertisement 2

Article content

back the fragile nature of Japan’s recovery after the world’s

third-largest economy logged three straight quarters of

expansion to June, led by capital spending and consumption.

The Ministry of Finance data showed on Wednesday exports

grew 19.0% in July from a year earlier, posting 17 straight

month of gains led by U.S.-bound shipments of cars and

China-bounds chip-related goods, beating economists’

expectations for a 18.2% gain.

Imports rose 47.2% in July year-on-year to a record 10.2

trillion yen, driven by costs of crude oil, coal and liquid

natural gas, versus a 45.7% rise expected, overwhelming exports

and bringing trade deficit to 1.4368 trillion yen ($10.69

billion) in July.

The yen’s fall by 23.1% from a year earlier added to higher

Advertisement 3

Article content

import costs, the data showed.

Separate data showed Japan’s key gauge of capital spending

rose 0.9% in June from the previous month, versus a 1.3% gain

expected by economists in a Reuters poll.

Compared with a year earlier, core machinery orders, a

highly volatile data series regarded as a leading indicator of

capital spending in the coming six to nine months, grew 6.5%, it

showed.

Reflecting corporate resilience, the Reuters Tankan

sentiment index for manufacturers rose 4 points to 13 in August

and is seen up further to 15 over next three months.

The service-sector index rose to 19 from 14 in July and was

seen steady in November helped in part by the lifting of

coronavirus curbs among industries such as tourism and eateries.

($1 = 134.3800 yen)

(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



Source link

Comments are closed.