The Strategist

Japanese exports fall for the first time since 2021

08/21/2023 - 03:47

Japan's export exports decreased by 0.3% in yearly terms in July.

This is the first decline since 2021. Reuters surveyed economists who predicted an even larger decline of 0.8%. Japanese exports increased by 1.5% in June.

The fall coincided with a drop in demand for Japan's exported chip manufacturing machinery and light petroleum products. Future macroeconomic volatility and erratic growth in the Chinese economy could have a detrimental effect on exports.

The largest trading partner of Japan is China, whose exports decreased by 13.4% in July (dropping for the eighth consecutive month). Japanese exports to the US increased at the same time by 13.5%, reaching a new high. 

Experts do not anticipate that exports to the US and Europe will be sufficient to make up for the decrease in shipments to China. Takeshi Minami, senior economist of Norinchukin Research Institute, stated that "China remains weak, and I don't expect further growth in demand from Europe and the US."

In July, imports to Japan decreased by 13.5%. This is the fourth drop in a row.