Shipping containers are seen at a port in Tokyo, Japan, March 22, 2017. REUTERS/Issei Kato
TOKYO, Aug 17 (Reuters) – Japan's imports jumped to a record amount in July, boosted by global fuel inflation and a weak yen, outweighing exports and deepening the trade deficit, in a sign of a further worsening in the terms of trade for the export-oriented economy.
The trade data came on the heels of Reuters Tankan, which showed improvement in Japan's business sentiment in August, while a key gauge of corporate capital spending rebounded in June from the previous month's decline. read more
While the mixed batch of data provides some evidence of resilience, policymakers are likely to maintain calls for more stimulus as the world's third-largest economy struggles to shake off the hit from the pandemic and as the global outlook dims.
"Exports are likely to slow down ahead due to global tightening of monetary policy, which could sap corporate appetite for investment," said Takeshi Minami, chief economist at Norinchukin Research Institute.
"Japan's export-led economy will be losing momentum towards later this year and early next amid fears of global downturn."
Ministry of Finance data showed on Wednesday exports grew 19.0% in July from a year earlier, posting 17 straight months of gains led by U.S.-bound shipments of cars and China-bound chip-related shipments, beating expectations for a 18.2% gain.
Imports rose 47.2% in July year-on-year to a record 10.2 trillion yen ($76.06 billion), driven by costs of crude oil, coal and liquid natural gas. That beat expectations for a 45.7% rise and overwhelmed exports, bringing the trade deficit to 1.4368 trillion yen in July.
It marked a full straight year of monthly trade deficits, the longest streak since the 32-month run of shortfalls to February 2015.
The yen's 23.1% fall from a year earlier added to higher import costs, the data showed.
Separate data showed Japan's new machinery orders, a key gauge of capital spending, rose 0.9% in June from the previous month, reversing the previous month's decline but below the 1.3% gain expected by economists.
In April-June, core machinery orders grew 8.1% from the previous quarter, posting the fastest growth since the final quarter of 2020. Firms are expecting a 1.8% decline in July-September core orders, pulling back from the solid growth seen in the second quarter, a government official told reporters.
However, there are downside risks such as China's economic slowdown and a COVID-19 resurgence, the official added.
Reflecting corporate resilience, the Reuters Tankan sentiment index for manufacturers rose 4 points to 13 in August and is seen up further to 15 over next three months.
The service-sector index rose to 19 from 14 in July and was seen steady in November helped in part by the lifting of coronavirus curbs among industries such as tourism and eateries.
($1 = 134.1000 yen)
Our Standards: The Thomson Reuters Trust Principles.
Britain's deputy finance minister on Saturday played down a historic collapse in the pound and government bonds in response to the country's new economic growth plan, which sent international investors heading for the exit.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved