Japan has joined the likes of China, South Korea, Singapore, Thailand, and Indonesia in revealing a sharp slowdown in exports.
China’s fall – 4.4% in December (and a 7.6% drop in exports) took the headlines last week, but the falls elsewhere have mounted and on Wednesday Japan revealed that exports in December suffered their largest year-on-year fall in more than two years thanks to a sharp drop in demand from China.
That saw Japan’s trade balance in 2018 fall into the first deficit in three years.
The value of Japan’s December exports fell 3.8% from December 2017, according to a report from the country’s finance ministry on Wednesday.
It was the biggest on-year fall since October 2016 and underscored the impact of Donald Trump’s trade war with China is having on other countries and on the global economy.
Exports to China slid 7%, as demand for Japanese semiconductor processing equipment and smartphone parts dropped – confirming the news earlier this month from Apple of a fall in iPhone sales, especially in China.
Japanese Finance Ministry officials tried to spin the data by claiming the fall was because of a solid rise in demand a year ago. But there’s more and more evidence the Chinese slowdown and the Trump trade war are knocking confidence and demand across Asia and especially in China, and among Japanese exporters.
For example earlier this week, Kyoto-based Nidec Corp, which supplies components to Apple, cut its earnings forecast, blaming the US-China trade dispute for a slowdown in Chinese demand.
December’s drop followed two months of growth. Exports to Asia shrank 6.9% with those to China, dropping 7% and shipments to Hong Kong and South Korea down 17.3% and 11.6%, respectively. Shipments to the US, Japan’s largest market globally, rose 1.6%.
December’s imports rose just 1.9% from a year ago against forecasts for a 3.7% rise, resulting in a trade deficit of ¥55.3bn ($US505.6m).
Other countries in the region whose exports shrank in December include China, South Korea, Indonesia, Thailand and Singapore.
For the full year, Japanese exports grew 4.1% down from nearly 12% in 2017, while yearly import growth slowed to 9.7% from 14.1%.
For the 2018 calendar year, Japan reported a 1.2 trillion yen trade deficit (more than $US10 billion), partly due to a surge in crude oil imports from Saudi Arabia, liquefied natural gas from Australia and that slowing in export growth.
