Exports from Japan record fastest growth since first half of 2010

In June, exports from Japan rose by 48.6%, from a year earlier, led by heightened demand from the United States and China supporting hopes for an economic recovery in the world’s third-largest economy.

Japan’s rise in exports, the fourth straight month of double-digit gains, has remained strong despite a global shortage of chips which has weighed on its car production and shipments.

With internal demand weakening due to renewed coronavirus curbs, policymakers are counting on external demand to revive growth.

Japan’s exports grew by 23.2% in the first half of this year, up for the first time in five periods and exceeded pre-pandemic levels seen in the first half of 2019. Japanese exports recorded their fastest growth since the first half of 2010.

“China’s economy may be pausing but stimulus measures are being taken. With the help of recovery in Europe and America, it is expected to pick up again,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “That will help Japanese exports remain in an uptrend, backed by car exports as well as capital goods and information-related items.”

Exports to China, Japan’s biggest trade partner, rose by 27.7% in the year to June, led by demand for chip-making equipment, raw materials and plastic.

Exports to the United States also grew by 85.5% in June, driven by shipments of auto parts, cars, and motors.

The trade balance came to a surplus of $3.49 billion (383.2 billion yen), versus the median estimate for a 460.0 billion yen surplus.

Japan’s economy shrank an annualised 3.9% in January-March and likely barely grew in the second quarter, as the pandemic took a toll on service spending.

($1 = 109.8700 yen)

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