In May, Japan’s exports went down at the fastest pace in four months, thus reacting to supply chain disruptions caused by the Kumamoto earthquake. Another reason was the slow growth in emerging markets. It definitely foreshadows downbeat trade prospects for the current quarter.
As the Ministry of Finance revealed on Monday, in May, Japanese exports edged down 11.3% year-on-year, compared with the forecast for a 10.4% annual drop and a 10.1% annual sag in April.
Exports will most likely grow in the nearer months because overseas demand is demonstrating evident signs of stabilization. However, Shinzo Abe, Japan’s Prime Minister is still under pressure to back up growth as further revenues in the Japanese yen threaten exports as well as corporate earnings.
There’s a strong reason to believe that exports are going to pick up from July-September, because the country isn’t facing a recession, though higher revenues in Japan’s currency would be a serious problem.