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Feb exports rise 6.5%, undershoot forecasts
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Imports up 8.3%
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Japan posts trade deficit for 19th straight month
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China-bound shipments slide, stoke fears of global
downturn
By Tetsushi Kajimoto and Kantaro Komiya
TOKYO, March 16 (Reuters) - Japan posted two straight
years of export gains in February, led by solid U.S.-bound
shipments of cars, although expectations of a strong recovery in
demand are quickly fading amid global monetary tightening and
worries about banks worldwide.
The world's third-biggest economy has struggled to make a
solid post-COVID recovery, undermined by lacklustre household
consumption and a global slowdown.
Slowing shipments to China, which fell for a third straight
month, have also shattered policymakers' hopes for a quick
rebound from the pandemic doldrums.
The Ministry of Finance (MOF) trade data released on
Thursday showed exports grew 6.5% year-on-year in February,
driven by U.S.-bound shipments of cars but undershooting a 7.1%
increase expected by economists in a Reuters poll. It followed a
3.5% rise in the previous month.
Exports to China, Japan's largest trading partner fell 10.9%
year-on-year in February, registering a second straight month of
double-digit decline, as demand weakened for cars, auto parts
and display-making equipment.
Imports rose 8.3%, versus the median estimate for a 12.2%
increase, resulting in a trade deficit of 897.7 billion yen
($6.75 billion). The yen's 13.5% depreciation versus the dollar
made the costs of energy imports even higher.
Japan has now posted a trade deficit for 19 straight months.
The Japanese economy narrowly averted a recession in the
final months of 2022, as consumption remained weak while exports
were hampered by slowdown in global growth.
Monetary tightening across the world, supply chain
constraints and the Ukraine war have undercut Japan's recovery.
"Chances are 50-50 that Japan may slide into recession,"
said Takeshi Minami, chief economist at Norinchukin Research
Institute.
More optimistically, the leading gauge of business investment showed a strong reading, providing a glimmer of hope for a potential pick-up in private demand.
The data released on Thursday showed core machinery orders rose 9.5% in January from a month earlier, the biggest rise in more than two years. Ramping up investment to meet post-pandemic demand, service sector companies' orders jumped 19.5% to a level last seen in November 2019. However, orders from manufacturing companies fell 2.6% dragged down by metal, electronics and auto firms due to the weak global economy and reduced demand for semiconductors. ($1 = 132.9600 yen) (Reporting by Tetsushi Kajimoto; Editing by Simon Cameron-Moore)
