Japan October exports massively beat estimates on robust growth in shipments to Asia and Europe
Shipping container loads dock at Tokyo Bay.
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Japan’s exports in October exceeded expectations, with government data released on Friday showing significant growth in shipments to Europe and Asia.
Exports grew by 3.6% year on year, surpassing the 1.1% growth forecasted by economists polled by Reuters.
Although the growth was slightly lower than the 4.2% gain seen in September.
Exports to Asia increased by 4.2%, while shipments to Western Europe surged by 8.8% compared to the previous year. This helped offset the 2.7% decline in exports to North America, with goods shipped to the U.S. falling by 3.1%.
Automobile shipments, which are the largest Japanese exports to the U.S. by value, declined by 7.5% compared to the same period last year, but this was a softer decline than the 24.2% drop seen in the prior month.
The data comes at a time when Japan is embroiled in a diplomatic dispute with its largest trading partner, China, over Prime Minister Sanae Takaichi’s comments regarding Taiwan.
The impact of this dispute on trade could be reflected in next month’s data.
The Asia Group reported on November 19 that mainland China had suspended imports of seafood from Japan. It also pointed out that Chinese social media showed some Japanese brand stores in Shanghai and Beijing “voluntarily” closing for several days citing “reasons that everyone knows.”
Imports to the world’s fourth-largest economy unexpectedly rose by 0.7%, defying expectations of a 0.7% decline from the Reuters poll.
The stronger-than-expected exports data comes as a relief for Japan’s economy, which struggled in the third quarter. The country’s GDP contracted by 0.4% quarter on quarter, with net exports dragging the quarterly figure down by 0.2 percentage points.
Japan also released its consumer inflation data on Friday, with headline inflation now running above the Bank of Japan’s 2% target for 43 consecutive months.
The Nikkei 225 was down by 2.38% after the data release, while the Japanese yen rose marginally to trade at 157.39 against the dollar.
This development comes as Japan’s Finance Minister Satsuki Katayama hinted at the possibility of intervening in the market, expressing concern over the recent sharp movements in the currency market, as reported by Reuters.
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