(Bloomberg) — Japan’s export growth slowed while posting a ninth straight advance, in an outcome underscoring the uneven state of the economic recovery.
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Exports increased 5.6% in August from a year ago, decelerating from 10.2% in the previous month, the Ministry of Finance reported Wednesday. The result, which missed the 10.6% consensus estimate from economists, was driven by a 9.9% decline in auto exports, with shipments of construction and mining machinery also falling.
Imports climbed 2.3%, falling short of the 15% gain forecast by economists. The trade deficit widened to ¥695.3 billion ($4.9 billion).
The weaker-than-expected data may give officials at the Bank of Japan another reason to hold policy steady when the board gathers this week. Economists responding to a Bloomberg survey were unanimous in forecasting a hold for Friday’s decision, with many expecting a rate increase in the fourth quarter.
The data were at odds with the BOJ’s assessment in July. In the outlook report released after the board meeting that month, the bank said, “exports and production are likely to return to an uptrend, mainly due to a pick-up in global demand for IT-related goods, as overseas economies continue to grow moderately.”
Wednesday’s data were also inconsistent with wider trends for trade. The World Trade Organization said earlier this month that its goods barometer, a gauge for global trade activity, rose to 103 compared with a reading of 100.6 in March, with components of the barometer such as autos, shipping containers and air freight showing at or above-trend levels.
Among products supporting Japan’s export performance in August were semiconductor manufacturing equipment, which posted a 55.2% gain. Japan’s tech sector has benefited from a wave of global demand for artificial intelligence development, which has generated high demand for advanced semiconductors and related machinery in the US and other developed nations.
On a regional basis, exports to the US fell for the first time in almost three years, edging 0.7% lower, and those to Europe fell by 8.1%, while shipments to China rose 5.2%.
(Updates with more details from report)
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