AAP Finance

Japan exports fall 15% in August

By AAP Newswire

Japan's trade surplus widened in August as the pandemic pummeled a wide array of industries and sapped consumer demand.

The 15 per cent drop in exports from a year earlier was outpaced by a more than 20 per cent decline in imports, according to finance ministry data released on Wednesday.

In one rare bright spot, exports to China rose 5 per cent.

However both exports and imports with the US fell more than 20 per cent, helping reduce the politically sensitive trade surplus by 20 per cent to 373 billion yen ($A4.8 billion).

Many Japanese manufacturers provide chemicals, equipment and components for Chinese-assembled products.

Robust exports have recently helped drive growth but suffered as China's economy slowed and the pandemic took hold.

The pace of the decline in exports has lessened as pandemic-related shutdowns in China, the US and Europe eased.

Exports fell 28 per cent year-on-year in May, 26 per cent in June and 19 per cent in July.

Exports in August totalled 5.23 trillion yen, outpacing 4.98 trillion yen in imports, leaving a surplus of 248 billion yen. That compared with a 152.2 billion yen deficit a year earlier.

Trade in most categories of products declined in August, with exports of transport equipment such as vehicles falling 23 per cent. Imports have been falling in Japan for over a year.

Helping boost the trade surplus, imports of oil, gas and other fuels plunged 45 per cent, partly thanks to lower prices for many commodities.

Despite the latest weak data, surveys of manufacturers show new export orders are recovering, said Tom Learmouth of Capital Economics.

"But while goods exports will continue to recover as activity picks up in Japan's trading partners, exports of goods and services may not reach pre-virus levels until early-2022," he reported.