Japan's export recovery slowed in August, pointing to slower growth in production and fuelling concern that the economy may lose momentum as the impact of stimulus spending around the world fades. The Bank of Japan last week upgraded its view on the economy, saying improving exports and output heightened the chances that its forecast for a moderate pick-up early next year would be met, but the data cast doubt on this scenario.
"Japan isn't participating much in the narrowing declines in exports from the region. What's hurting Japan more is that in terms of products it is losing competitiveness to newcomers," said Simon Wong, regional economist at Standard Chartered in Hong Kong.
Exports fell 0.7 percent in August from July on a seasonally adjusted basis, trade data showed on Thursday, largely due to a rise in the yen against other currencies. The real export index, compiled by the BOJ, rose 1.5 percent in August from July, slowing from a 2.4 percent gain in July. Compared with a year before, Japan's exports fell 36 percent in August, matching a median market forecast and largely unchanged from the previous month's annual slide of 36.5 percent.
Exports to the United States fell 34.4 percent in August from a year earlier, less than the 39.5 percent drop in July. Overall, exports have been falling less in year-on-year terms after tumbling nearly 50 percent in February. Output has bounced back from a steep fall triggered by the global crisis, helping Japan emerge from its worst recession in modern history.
Exports to China fell 27.6 percent from a year earlier, more than the previous month's 26.5 percent decline, reflecting weak demand for steel products and electronic parts. That pushed exports to Asia down 30.6 percent in August from a year earlier, against the previous month's 29.9 percent fall.
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