Japan’s exports grew for the seventh straight month in June, supporting expectations that the economy will recover in the second quarter from the previous three-month contraction.
Exports rose 5.4% from a year ago, led by chip-making gear and nonferrous metals, the Finance Ministry reported on Thursday. The result missed economists’ consensus estimate of a 7.2% increase.
Imports rose 3.2 percent, compared with a 9.6 percent gain analysts had estimated. With a smaller-than-expected increase in imports, the trade balance turned into a surplus of ¥224 billion from a deficit of ¥1.22 trillion in May.
The value of deliveries was boosted by a weak yen, which averaged ¥156.64 against the dollar in June, according to the Finance Ministry, 12.5% weaker than a year ago.
By region, Japanese shipments to the U.S. rose 11%, while those to China rose 7.2% and exports to the European Union fell 13.4%. Clouds loom over the outlook as China’s growth unexpectedly slowed to its worst pace in five quarters in the three months ended June, putting pressure on policymakers to step up support.
The weak yen is helping boost overseas earnings for Japanese exporters, but the effects on the overall economy are mixed. The softer currency is also fueling concerns about inflation in energy, food and materials for the resource-poor country.
Japan’s economy needs strong exports to recover in the quarter to June, especially as consumer spending remains vulnerable with persistent inflation weighing on households. The economy shrank in the first quarter, with both consumers and businesses cutting back on spending.
