TOKYO (Reuters) – Japan’s exports rose for the first time in two years in December, driven by shipments to China, government data showed, offering a glimmer of hope for policymakers counting on an export-led recovery amid a resurgence of the coronavirus.
A recovery in exports may ease the risk of a double-dip recession, while the Bank of Japan is seen upgrading its growth forecast for next fiscal year at its rate review ending Thursday. The central bank is expected to stand pat on policy.
Still, the pace of recovery in Japan’s shipments paled in comparison with neighbouring export hubs such as China, Taiwan and South Korea, all of which saw a double-digit growth led by global demand for chip and tech products.
The Ministry of Finance data out on Thursday showed Japan’s exports rose 2.0% in December from a year earlier, slightly below a 2.4% increase expected by economists in a Reuters poll but up from a 4.2% decline in the previous month.
It marked the first annual increase since November 2018.
In a worrying sign, however, car exports fell 4.2% in the year to December, with shipments to the European Union plunging 32.2%. The fall comes as carmakers like Toyota Motor Corp and Nissan Motor Co Ltd are set to cut vehicle production this month due to a shortage of semiconductors as demand rebounds from the coronavirus crisis.
For the full year 2020, Japan’s car exports fell 20% — the biggest decline since shipments more than halved during the 2009 global financial crisis — making it the main culprit behind overall yearly export decline of 11.1%, the data showed.
“Exports are stalling due to restrictions aimed at preventing the spread of coronavirus infections in Europe and America,” said Yutaro Suzuki, economist at Daiwa Institute of Research. “A supply crunch among automakers caused by a shortage of chips could weigh on exports.”
By region, exports to China — Japan’s largest trading partner — grew 10.2% in the year to December, led by shipments of plastic, nonferrous metals and other raw materials.
Shipments to the United States — a key market for Japanese goods such as cars and electronics — dropped 0.7% year-on-year in December, dragged down by airplanes and chip-making equipment.
Exports to Asia, which accounts for more than half of Japanese shipments, advanced 6.1%, while shipments to the European Union decline 1.6%.
Imports fell 11.6% in the year to December, roughly in line with the median estimate, bringing a trade surplus of 751 billion yen ($7.25 billion).
($1 = 103.5700 yen)
(Reporting by Tetsushi Kajimoto; editing by Richard Pullin)
