TOKYO: Japan’s exports rose at a slightly slower pace than expected in July and shipment volumes extended their declines, data showed on Wednesday, adding to some doubts about the outlook for an economy that has only just started to pick up the recovery pace.

The outcome follows separate data last week that showed Japan’s economy rebounded strongly in the second quarter on robust consumption, backing the case for the central bank to continue its monetary policy tightening campaign.

Japanese exports rose 10.3% year-on-year in July, up for an eighth straight month, data from the Ministry of Finance showed, less than a median market forecast for an 11.4% increase. The sales were boosted by a weaker yen and compared with a rise of 5.4% in June..

Overall shipment volumes, however, fell 5.2% last month from the year-ago period, the sixth consecutive month of declines.

Exports to China, Japan’s biggest trading partner, rose 7.2% in July from a year earlier due to strong demand for chip-making equipment, while those to the United States were up 7.3%, the data showed.

Imports grew 16.6% in July from a year earlier versus a 14.9% increase expected by economists.

The trade balance stood at a deficit of 621.8 billion yen ($4.28 billion), compared with a forecast deficit of 330.7 billion yen.

The emerging signs of sustained wage growth and expectations it would help inflation durably reach the Bank of Japan’s 2% target were key factors behind the BOJ’s recent interest rate increases.

However, the central bank is facing challenges as it shifts away from a decade of ultra-loose monetary policy, including the squeeze on households from the rising cost of living.

Policymakers’ hopes that the export-engine will help bolster the economy have been undercut by uneven overseas demand and softness in major market China.

Governor Kazuo Ueda has said the BOJ will keep raising rates if the economy and prices move in line with its projection, but the past year’s broadly fragile recovery and the hit to consumption from a weak yen have continued to raise uncertainty about the policy normalisation path.