Japan’s export growth slowed for the sixth consecutive month in August, as a strong yen and cooling global demand rattled an already fragile recovery.
The value of exports climbed 15.8 percent from a year earlier to 5.22 trillion yen ($61.9 billion), the Ministry of Finance said Monday.
It was the slowest month for export growth this year. Exports expanded more than 23 percent in July and 28 percent in June.
The deceleration poses a major risk for Japan, which has depended on the rest of the world to make up for lacklustre demand at home. The country has turned to high-growth countries in Asia, particularly China, to drive its economy.
But that expansion is under threat as countries unwind stimulus measures that had underpinned global demand. Japanese exporters such as Toyota Motor Corp. and Sony Corp. also face the onslaught of a strong yen, which hit fresh 15—year highs against the U.S. dollar this month, and led the government to intervene in currency markets for the first time in six years.
An appreciating yen shrinks the value of repatriated profits for exporters and makes their products less competitive overseas. This year, the Japanese currency has strengthened about 10 percent against the dollar.
Exports to China, Japan’s biggest trading partner, rose 18.5 percent in August from a year earlier, while those to the European Union expanded 13.7 percent. Shipments to the U.S. climbed just 8.8 percent” a sharp slowdown from previous months.
Goldman Sachs economist Chiwoong Lee said in a report he expects the U.S. slowdown to spill over to Asia—bound exports in the months ahead.
Machinery shipments to the world rose 41.1 percent, and vehicle exports rose 18.7 percent.
Imports in August rose 17.9 percent to 5.12 trillion yen ($60.7 billion), resulting in a lower trade surplus of 103.2 billion yen ($1.2 billion).
The export figures are the first of a slew of economic indicators due out this week. The Bank of Japan will release its closely watched “Tankan” survey of business sentiment Wednesday, and industrial production figures will follow Thursday. Consumer prices, unemployment and household spending will be released Friday.
Monday’s results had little effect on investors, who drove the benchmark Nikkei 225 stock average up 1.4 percent to 9,606.25. Exporters gained on hopes for a stronger yen, which the central bank could spur with further monetary easing when it meets next week for a policy board meeting.
