Sunday, 26 September, 2021
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Japan’s exports seen surging in August

TOKYO: Japan’s exports likely surged for the sixth straight month in August thanks to strong global demand for machinery goods and a flattering comparison with last year’s pandemic-induced slump, a poll showed on Friday.

Japan’s wholesale prices were expected to stay at more than 10-year highs in August due to global commodity inflation and a weak yen, while firms’ machinery orders likely rose in July, according to analysts polled, report agencies.

Exports likely jumped 34.0per cent in August from a year earlier, the sixth month of double-digit gains, though they were seen slowing from July’s 37.0per cent increase, the poll showed.

Export growth has been strong even as factory halts and supply issues due to the spread of COVID-19 variants in Southeast Asia and a global chip shortage are hitting Japanese carmakers.

Takeshi Minami, chief economist at Norinchukin Research Institute, said there are heightened worries about whether a steady economic recovery holds up.

“China’s economic recovery has stalled recently and the spread of the Delta variant in advanced nations is having a suppressing effect,” he said.

Imports likely rose 40.0per cent year-on-year in August, which would result in a trade deficit of 47.7 billion yen (US$434.74 million) after two straight months of surpluses, the poll showed.

Separate data from the Bank of Japan is expected to show Japan’s wholesale prices rose 5.6per cent year-on-year in August, matching the prior month’s 13-year high.

The corporate goods price index (CGPI), which tracks the prices companies charge each other for their goods, probably rose 0.2per cent month-on-month in August.

The finance ministry will announce the trade data at 8:50 a.m. on Sept. 16 (2350GMT, Sept. 15), while the CGPI data is due at 8:50 a.m. on Sept. 13 (2350GMT, Sept. 12).

Cabinet Office data due at 8:50 a.m. Wednesday (2350 GMT Tuesday) will likely show core machinery orders, a highly volatile data series as a leading indicator of capital expenditure in the coming six to nine months, gained 3.1per cent month-on-month in July.

Compared with a year earlier, core orders, which exclude those of ships and electricity utilities, likely grew 15.7per cent in July partly because of a double-digit drop in the same month last year.

Japan’s economy grew faster than initially estimated in the April-June quarter, helped by solid capital expenditure, although a resurgence in COVID-19 is undermining service-sector consumption and clouding the outlook.