Japan’s export resurgence continues to lose momentum as shipments to Asia and China slow.
The fall is partly due to the slowing in the Chinese economy, but also the fact that the comparison with the same month of last year is now looking less impressive simply because of the gathering strength of the recovery a year ago.
The last quarter of 2010 should see the comparison worsen again as the surge in Japanese exports in the last months of 2009 narrows the gap with the same month this year.
By the first quarter of 2011, Japanese export growth could be negative, again.
Exports in January of this year were up more than 45%.
In June they were almost half that rate with a 27.7% rise on June of last year, according to Finance Ministry figures released in Tokyo yesterday.
That was the fourth decline in as many months because of the slowing in demand from Asia and China and the improving state of export growth a year ago.
There was a 1.8% fall in exports from May, which is an indicator that should be watched in coming months.
Imports rose 26.1% from a year earlier, leaving a trade surplus of 687 billion yen ($US7.8 billion).
Much of that has to do with the higher prices for iron ore, coal, gas and other energy imports, although the stronger yen has cut some of the impact.
Exports to the US gained 21.1%, up from the just over 17% annual rate in the year to May.
Exports to Western Europe grew just 6.7% (17.4% annual in May), with shipments to France and Ireland showing falls.
Shipments to Asia, which account for more than half of total exports, rose 31.7% in June from a year earlier but that still represented a slowing for the fifth straight month.
Exports to China rose 22.0% from a year earlier, also marking the fifth straight month of slowdown.
Japan’s finance ministry raised its assessment of the nation’s economy for the second straight quarter in its April-June report, released Monday, saying the economy is steadily recovering.
"Although the economy is in a severe situation, it is steadily picking up, albeit at a gradual pace," the ministry said, pointing to improving industrial output and consumption in some areas.
That compares with the wording in the previous quarter: "Although the economy is in a severe situation, there are signs of improvement, particularly in production".
Exports to Australia jumped 24%, but imports from Australia surged almost 50% in the month, thanks to higher prices for iron ore, coking and thermal coal and gas.
As a result, Japan’s trade deficit with Australia was up more than 60% on a year ago.
The South Korean economy grew 1.5% during the second quarter, for an annual growth rate of 7.2% in the year to June.
The rise in real gross domestic product beat the Bank of Korea’s own forecast for growth of 1.2%, and was also better than market estimates.
However, the rate was still slower than the 2.1% growth seen in the January-March quarter.
The Bank of Korea said the manufacturing sector grew 5.1% during the period, "mainly due to the growth in machinery equipment, fabricated metal products and automobile manufacturing".
Services grew by 0.2%, but construction contracted by 0.8%, "which was attributable to the sluggishness in residential-building construction", the central bank said.
The Bank of Korea in July joined central banks in Thailand, Taiwan, Malaysia and India in raising rates.
And the Reserve Bank of India meets this afternoon and is expected to push rates up again.
In an unscheduled move on July 2, the central bank hiked each of its key policy rates by 0.25% to try and slow the country’s sharply rising rate of inflation.
The RBI raised the repurchase rate, its main lending rate, to 5.50% and the borrowing rate, or reverse-repo rate, to 4%.
Data later in the month then showed that India’s benchmark wholesale price index inflation rate in June accelerated to 10.55% from a year earlier, compared with 10.16% in May, increasing pressure on the central bank to lift rates at today’s meeting.
Moody’s yesterday raised one of India’s credit ratings
