Japan’s May Exports Rise Fastest in Over Two Years

“The main scenario is Japan’s exports will continue to recover,” said Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanley Securities.

“However, the pace of growth could slow somewhat as inventories of certain goods, like electronics, start to build up overseas.”

Exports of cars and car parts rose partly because an earthquake in Kumamoto last year in May temporarily shut down production of these goods, Tonouchi noted.

Japan’s exports to the United States rose 11.6 percent in May from a year ago, the fastest increase since July 2015, due to an increase of shipments of autos and auto parts.

The trade surplus with the United States was 411.1 billion yen (2.9 billion pounds) in May, up 19.0 percent from the same period a year ago. In April, Japan’s trade surplus with the United States fell an annual 4.2 percent.

A large trade surplus could draw criticism from the Trump administration, which has repeatedly indicated that it prefers protectionist policies to reduce the U.S. trade deficit and increase exports.

Exports to China increased 23.9 percent year-on-year in May, following a 14.8 percent annual increase in April.

Larger shipments of flat panels and semiconductor manufacturing equipment drove the gains in China-bound exports.

Exports to Asia, which includes China, rose 16.8 percent in May from a year ago, the fastest increase in three months, due to increased shipments of electronics to Hong Kong and steel to Indonesia, the data showed.

In terms of volume, Japan’s exports rose 7.5 percent in May from a year ago, the fastest gain in three months, another indication that overseas demand is firm.

Japan’s imports rose 17.8 percent in the year to May, the strongest gain since early 2014, versus the median estimate for a 14.8 percent annual increase, as a rise in the price of oil from a year ago pushed up the value of imports.

Excluding oil imports, the data showed…

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