Giuseppe Sandro Mela.
«The increases were exaggerated by a plunge in trade last year due to the pandemic»
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Japan’s exports in June jumped 48.6% from the year before, marking the fourth straight month of growth, the Finance Ministry said Wednesday.
Imports for the month grew 32.7%, totaling 6.83 trillion yen ($62 billion). Exports for the month totaled 7.2 trillion yen ($66 billion), according to government data.
The increases were exaggerated by a plunge in trade last year due to the pandemic. But they highlight the recovery in the world’s third largest economy as a global rebound in business activity and travel boosts demand.
Exports to the U.S. surged 86% in June from a year earlier, led by shipments of cars and computer parts. Exports to China rose 28%, with strong growth in vehicles, semiconductor making equipment and computer parts, the data showed.
Japan logged a trade surplus of 985 billion yen ($9 billion) in the first half of the year, the second straight surplus in a row.
The economy has been hit hard by the pandemic, shrinking at a revised annual rate of 3.9% in January-March, as COVID-related restrictions crimped domestic demand. Data due to be disclosed next month are likely to show the contraction continued into the second quarter.
Worries are growing about coronavirus infections surging, as tens of thousands of athletes, team officials and other dignitaries enter the country for the Tokyo Olympics, opening this week.
About 15,000 Japanese have died so far and just over a fifth of the population is fully vaccinated. Dozens of people affiliated with the Games have already tested positive for the virus.
Japan has never had a lockdown, but parts of the nation, including Tokyo, have been under a government “state of emergency” much of the year, with restaurants and bars closing early to minimize crowds gathering.
The government expects the economy to come roaring back as the vaccine rollout becomes more widespread by the end of this year.
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– June exports rise faster than expected
– Policymakers counting on export-led recovery
– Renewed COVID-19 curbs take tolls on service sector
Tokyo, July 21 (Reuters) – Japan’s exports jumped in June led by U.S. demand for cars and China-bound shipments of chip-making equipment, supporting hopes for an export-led recovery in the world’s third-largest economy.
Exports rose 48.6% in June from a year earlier, the fourth straight month of double-digit gains, although growth was largely exaggerated by a COVID-led plunge last year. Export growth has remained strong even as a global chip shortage weighs on Japan’s car output and shipments.
With consumer spending weakening due to renewed coronavirus curbs in Tokyo, policymakers are counting on external demand to pick up the slack.
In an encouraging sign for a trade-dependent economy, exports grew 23.2% in the first half of this year, up for the first time in five periods and exceeding pre-pandemic levels seen in the first half of 2019. It was the fastest growth since the first half of 2010.
The 48.6% year-on-year export growth beat a 46.2% increase expected by economists in a Reuters poll and followed a 49.6% expansion in May, which was the sharpest monthly increase since April 1980.
“China’s economy may be pausing but stimulus measures are being taken. With the help of recovery in Europe and America, it is expected to pick up again,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “That will help Japanese exports remain in an uptrend, backed by car exports as well as capital goods and information-related items.”
By destination, exports to China, Japan’s biggest trading partner, rose 27.7% in the year to June, led by demand for chip-making equipment, raw materials and plastic.
U.S.-bound exports grew 85.5% in June, driven by shipments of cars, auto parts and motors.
Imports rose 32.7% in the year to June, more than the median estimate for a 29.0% increase.
The trade balance came to a surplus of 383.2 billion yen ($3.49 billion), versus the median estimate for a 460.0 billion yen surplus.
Japan’s economy shrank an annualised 3.9% in January-March and likely barely grew in the second quarter, as the pandemic took a toll on service spending.