Japan’s exports fell for a seventh consecutive month in April as the yen strengthened, underscoring the mounting challenges to Prime Minister Shinzo Abe’s efforts to revive economic growth.
Overseas shipments declined 10.1 percent in April from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 9.9 percent drop. Imports fell 23.3 percent, leaving a trade surplus of 823.5 billion yen ($7.5 billion).
Even after coming off an 18-month high earlier this month, the Japanese currency has gained 9 percent against the dollar this year, eroding the competitiveness of the nation’s products overseas and hurting the earnings of exporters. Concern about the impact of the yen was on show over the weekend as Finance Minister Taro Aso and his U.S. counterpart disagreed over the seriousness of recent moves in the foreign exchange market.
“The yen’s appreciation is taking a toll on Japanese exports,” Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo, said before the report was released. “Exports are looking weak in the April-June period, posing a downside risk to Japan’s economy.”
Maruyama also said supply chain constraints following the earthquakes in the Kumamoto area last month may affect shipments of some products, such as auto parts and electronic components, slowing Japanese exports to China and other Asian nations.
The earthquakes hit the southern island of Kyushu in April, bringing a halt to production at factories of companies including Sony Corp. and Toyota Motor Corp.
Monday’s report also shows that:
- Exports to the U.S. fell 11.8 percent in April from a year earlier, while shipments to EU rose 9.9 percent.
- Exports to China, Japan’s largest trading partner, dropped 7.6 percent.
Gross domestic product expanded by an annualized 1.7 percent in the three months ended March 31, after a 1.7 percent contraction in the previous quarter. The leap year provided an extra day of production and spending to bolster the data.