Japanese exports rose thanks to strong demand from the United States and China

Pur Tetsushi Kagemoto

TOKYO (Reuters) – Japan’s exports rose in June on the back of demand for cars in the United States and shipments of semiconductor manufacturing equipment to China, raising hopes of an export-led recovery in the United States, the third world economy.

Exports increased 48.6% in June from a year earlier, marking the fourth consecutive month of double-digit gains, although the growth figure was significantly exaggerated due to the collapse caused by COVID last year. Export growth remained strong even as the global shortage of semiconductors weighed on Japan’s auto production and shipments.

With consumer spending weakening due to the new coronavirus restrictions in Tokyo, business leaders are relying on external demand to offset the situation.

In an encouraging sign for an economy highly dependent on trade, exports grew by 23.2% in the first half of this year, increasing for the first time in five periods and exceeding pre-pandemic levels recorded in the first half of 2019. This was the year. Fastest growth since the first half of 2010.

Year-on-year export growth of 48.6% exceeded the 46.2% increase that economists had expected in a Reuters poll, and a 49.6% expansion followed in May, the largest monthly increase since April 1980.

“The Chinese economy may be on hold, but stimulus measures are being taken. With the help of the recovery in Europe and America, it is expected to rebound again,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “This will help Japanese exports to continue the upward trend, supported by exports of automobiles, as well as capital goods and related information materials.”

By destination, exports to China, Japan’s largest trading partner, increased 27.7% in the year to June, driven by demand for semiconductor manufacturing equipment, raw materials and plastics.

Exports to the United States grew 85.5% in June, driven by shipments of automobiles, auto parts and engines.

Imports increased 32.7% in the year through June, more than the median estimate of a 29.0% increase.

The trade balance showed a surplus of 383.2 billion yen ($3.49 billion), compared to an average estimate of a surplus of 460 billion yen.

Japan’s economy shrank 3.9% annually in the January-March period, and may have barely grown in the second quarter, as the pandemic hit spending on services.

(dollar = 109.8700 yen)

(Reporting by Tetsushi Kajimoto; Editing by Sam Holmes; Translated by Michael Sosen)