Japan’s hot export growth cools as COVID-19 hits its supply chain


Tokyo — Japan’s exports in August showed double-digit growth, driven by strong shipments of chip manufacturing equipment, but COVID-19 hit major Asian supply chains, slowing factory production As a result, the pace of growth has slowed.

Trade growth is unlikely to dispel concerns about the outlook for the Japanese economy, which has not yet recovered to pre-pandemic levels after being hit hard by the collapse of world trade in the first quarter of 2020.

According to the Treasury, August exports rose 26.2% year-on-year, recording double-digit growth for the sixth straight month as strong demand for chip manufacturing equipment offset slow shipments to the United States and the European Union. .. car’s.

However, growth was slower than economists expected at 34.0 percent in Reuters polls, a 37.0 percent advance from the previous month.

“Exports have driven the economy. Takumi Tsunoda, senior economist at Shinkin Central Bank, said the recovery scenario for the Japanese economy could be volatile if it didn’t grow.”

Policy makers are under pressure to keep vulnerable recovery intact. This has become suspicious due to the resurgence of pandemics in other parts of Asia, with manufacturing hubs such as Vietnam and Malaysia deploying blockades.

“Semiconductor issues have had a huge impact on automobile exports,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.

“As the bottleneck of parts supply in Southeast Asia continues, I think it is likely to affect exports at least until the end of the year.”

Last week, Toyota reduced its annual production target by 300,000 units as production at parts plants in Vietnam and Malaysia slowed due to an increase in COVID-19 infection.

While vaccination rates have improved and daily COVID-19 infections appear to have peaked, analysts say Japan expects Japan to grow 1.2% annually this quarter, far more than last month’s forecast. It’s late, a Reuters survey on Tuesday showed.

By destination, data show that shipments to China, Japan’s largest trading partner, increased 12.6% year-on-year in August, driven by chemicals and semiconductor components.

Exports to the United States, the world’s largest economy, surged 22.8 percent as strong demand for generators offset the decline in car shipments.

Shipments to Asia as a whole increased by 26.1%, the slowest pace in five months, while shipments to the European Union increased by 29.9% in August.

Imports in August increased 40.0% year-on-year in August, compared with a median increase of 40.0% due to increased demand for fuels and medical supplies.

As a result, the trade deficit was 635.4 billion yen ($ 5.81 billion), the largest deficit since December 2012, exceeding the median deficit of 47.7 billion yen.

Trade data follows a Reuters tankan survey on Wednesday, with Japanese manufacturers trusting for the first time in five months in September as the latest wave of COVID-19 forced factories shut down around Asia. It fell to a low level.

($ 1 = 109.4200 yen)

Daniel Roythink and Kentaro Komiya