Japan’s exports post seventh monthly decline

Tokyo: Japan’s exports fell for a seventh consecutive month in April as the yen strengthened, underscoring the growing challenges to Prime Minister Shinzo Abe’s efforts to revive economic growth.
Overseas shipments declined 10.1 per cent in April from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 9.9 per cent drop. Imports fell 23.3 per cent, leaving a trade surplus of 823.5 billion yen ($7.5 billion), the highest since March 2010.
Even after coming off an 18-month high earlier this month, the Japanese currency has gained 9 per cent against the dollar this year, eroding the competitiveness of the nation’s products overseas and hurting the earnings of exporters. Concern about the impact of the yen was on show over the weekend as Finance Minister Taro Aso and his US counterpart disagreed over the seriousness of recent moves in the foreign-exchange market.
"Exports are getting a hit from the yen’s gains and weakness in overseas demand, especially in emerging nations,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo, who added that last month’s earthquakes in Kumamoto also will likely slow exports. "There’s a high chance that Japan’s economy will return to contraction in the April-June period as domestic consumption and exports look weak.”
Monday’s report also shows that:
Exports to the US fell 11.8 per cent in April from a year earlier, while shipments to the EU rose 9.9 per cent.
Exports to China, Japan’s largest trading partner, dropped 7.6 per cent. Imports fell 23.3 per cent, the biggest decline since October 2009. Oil and liquefied natural gas contributed the most to the decline. The petroleum and coal tax was raised in April, which also could affect declines in energy imports. Impact of Quakes
The tremblors hit the southern island of Kyushu in April, bringing a halt to production at factories of companies including Sony and Toyota Motor. They disrupted parts suppliers, including Aisin Seiki, delaying production of Toyota vehicles.
Exports of cars to the US fell 4.4 per cent in April from a year earlier, declining for the first time since November 2014. The disruptions from the earthquakes could further hurt auto exports, according to the finance ministry.
Supply chain disruptions may affect shipments of auto parts and electronic components, slowing Japanese exports to China and elsewhere in Asia in the April-June period, according to Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo.
Gross domestic product expanded by an annualised 1.7 per cent in the three months ended March 31, after a 1.7 per cent contraction in the previous quarter. The leap year provided an extra day of production and spending to bolster the data.