By Tetsushi Kajimoto
TOKYO (Reuters) – Japan’s exports grew for the fourth straight month in March driven by U.S.-bound car shipments, although business confidence at big firms soured amid a slump in the yen and signalled that a sure-footed economic recovery was some time away.
Ministry of Finance data out on Wednesday showed Japan’s exports rose 7.3% year-on-year in March, compared with 7.8% gain in the previous month and 7.0% growth seen by economists in a Reuters poll.
However, in terms of volume, Japan’s shipments fell 2.1% year-on-year in March, casting doubt about the strength of the export engine, a key driver of the economy.
Policymakers will be keen to see solid export growth picking up the slack of feeble demand at home, which will allow the Bank of Japan to continue normalising monetary policy.
“When you look at export volume, the trend is looking down, pressured by a slumping German economy,” said Hiroshi Miyazaki, senior research fellow at Itochu Economic Research Institute.
“I expect exports to recover from April led by solid U.S. consumption. That would help Japan’s economic recovery, paving the way for the BOJ to raise rates again by around autumn.”
The trade data comes on the heels of a Reuters monthly poll that showed large companies’ business confidence slid in April, dragged down by cost-of-living pressures and shaky economic conditions in major market China.
The yen’s weakening to levels unseen since 1990 during the heyday of the asset-inflated bubble is lifting the cost of imports in a blow to household consumption, the survey showed.
The Japanese currency hit 34-year lows to the dollar beyond 154 yen this week, prompting repeated warnings from authorities that they stood ready to take action against speculative or destabilising currency moves.
A raft of data so far this year has pointed to insufficient demand in the economy. That’s one reason why the BOJ has flagged a cautious track to monetary tightening following its landmark decision to end negative interest rates last month.
“Our sales appear to be boosted due to the impact of a weak yen, but there’s no sign of recovery in terms of volume,” a manager of a chemicals maker wrote in the survey.
(Reporting by Tetsushi Kajimoto; Editing by Shri Navaratnam and Sam Holmes)
Comments