Tags: Weak | Japan | Exports | Demand

Weak Japan Exports Augur Poorly for Global Demand

Tuesday, 21 May 2013 08:49 PM

Japan's exports missed estimates in April and the trade deficit swelled, highlighting weakness in global demand that may weigh on efforts to revive the world's third-biggest economy.

Overseas shipments rose 3.8 percent from a year earlier, the Finance Ministry said in Tokyo Wednesday. That was less than the median 5.4 percent estimate of 26 economists surveyed by Bloomberg News. The trade deficit widened to the largest in three months at 879.9 billion yen ($8.6 billion).

While the yen's slide to the lowest in four years last week will aid Japanese companies by making their products more competitive in overseas markets, Wednesday's data showed that limited demand in the European Union is constraining exports. The latest numbers also showed the cost of a weak currency, as higher import costs drove a 10th straight trade deficit.

"The yen's depreciation won't be enough to end the deficit," Kiichi Murashima, chief economist at Citigroup Inc. in Tokyo, said before the report. "The trade deficit will continue through 2014."

The Japanese currency was at 102.53 per dollar at 9:08 a.m. Wednesday in Tokyo after touching 103.31 last week.

Bank of Japan officials were meeting Wednesday to set monetary policy, with analysts forecasting that they will stick with a plan for unprecedented easing unveiled in April.

Exports to the European Union fell 3.5 percent from a year earlier, while those to the U.S. jumped 15 percent. Shipments to China rose 0.3 percent.

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Japan's exports missed estimates in April and the trade deficit swelled, highlighting weakness in global demand that may weigh on efforts to revive the world's third-biggest economy.
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2013-49-21
Tuesday, 21 May 2013 08:49 PM
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