Japan's exports tumble as U.S. demand slumps, capex outlook weakens

By Tetsushi Kajimoto and Leika Kihara TOKYO (Reuters) - Japan's exports extended their double-digit slump into a fifth straight month in July as the coronavirus pandemic took a heavy toll on shipments to the United States, dashing hopes for a trade-led recovery from the deep recession. Core machinery orders, a leading indicator of business spending, also fell, suggesting the economy cannot count on domestic demand either as business investment weakened

Reuters August 19, 2020 07:06:16 IST
Japan's exports tumble as U.S. demand slumps, capex outlook weakens

Japans exports tumble as US demand slumps capex outlook weakens

By Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) - Japan's exports extended their double-digit slump into a fifth straight month in July as the coronavirus pandemic took a heavy toll on shipments to the United States, dashing hopes for a trade-led recovery from the deep recession.

Core machinery orders, a leading indicator of business spending, also fell, suggesting the economy cannot count on domestic demand either as business investment weakened.

The batch of weak data underscored the challenges for policymakers as they look to prop up economic activity after lockdowns were lifted in May, while containing a second round of infections.

Total exports fell 19.2% in July from a year earlier, compared with economists' median forecast for a 21.0% decrease, government data showed on Wednesday. It followed a 26.2% drop in the previous month.

By region, shipments to the United States - Japan's key market - declined 19.5% in the year to July.

Exports to China, Japan's largest trading partner, rose 8.2% in the year to July, while those to the rest of Asia were down 8.2%, the data showed.

Separate data showed core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, fell 7.6% in June, confounding market estimates of a 2.0% gain.

"Machinery orders are declining," the government said, revising down its assessment from the previous month when it said they were on a "weak note."

Manufacturers surveyed by the government expect core orders to fall 1.9% in the current quarter after dropping 12.9% in April-June, the data showed.

Japan's economy suffered a record annualised contraction in April-June as the pandemic crushed demand for cars and other exports and kept consumers at home.

Analysts expect any rebound in the current quarter to be modest as a resurgence of infections will likely put a lid on demand both at home and abroad.

(Reporting by Leika Kihara and Tetsushi Kajimoto; Editing by Sam Holmes)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Pulitzer Prize-winning photojournalist Danish Siddiqui killed in Afghanistan: Politicans, journalists pay tributes
India

Pulitzer Prize-winning photojournalist Danish Siddiqui killed in Afghanistan: Politicans, journalists pay tributes

The Pulitzer prize winner, who was in Kandahar covering operations against Taliban, was killed when he was riding along with the Afghan Special Forces

Indian photojournalist Danish Siddiqui killed during assignment in Afghanistan's Kandahar province
India

Indian photojournalist Danish Siddiqui killed during assignment in Afghanistan's Kandahar province

Siddiqui had also covered the 2020 Delhi riots, COVID-19 pandemic, Nepal earthquake in 2015 and the protests in Hong Kong

Danish Siddiqui's passing is a reminder of the high price one pays for showing the truth
India

Danish Siddiqui's passing is a reminder of the high price one pays for showing the truth

Danish's photographs were not just documentation, but the work of someone who went down to eye-level, as they say in photographic parlance.