Japanese exports grow at weakest pace since 2005
TOKYO (AFP) — Japan's trade surplus shrank 30.2 percent in March with exports growing at the weakest pace in almost three years due to the US economic slowdown, official figures showed Wednesday.
US-bound exports showed a double-digit plunge while demand from the rest of Asia cooled as the global economic climate grew increasingly chilly.
Exports grew by just 2.3 percent year-on-year -- the smallest increase since May 2005 -- while imports rose 11.1 percent.
The world's second-largest economy had a trade surplus of 1.12 trillion yen (10.86 billion dollars), below market forecasts for 1.36 trillion and down sharply from 1.60 trillion a year earlier, the finance ministry reported.
US-bound exports tumbled 11.0 percent, the sharpest drop since November 2003, extending a losing streak to a seventh month, the longest in four years.
Overall the figures were "worrying," said Keiji Kanda, economist at Daiwa Research Institute.
"The root of it all is weakening individual consumption (in the United States) that has been damaged by the falling stocks and housing woes," he said.
Brisk overseas demand for Japanese cars, electronic appliances and other goods have been a key driver of a recovery in Asia's largest economy after a slump stretching back over a decade.
With the US economy now buckling under the pressure of a severe housing slump and related credit crunch, corporate Japan is cutting back on its investment plans, fanning fears of a recession here.
US-bound vehicle exports, a key driver of Japan's economy, fell 11.1 percent in March with auto parts shipments plunging 19.8 percent.
Asian exports to the United States are likely to slow further as the world's largest economy is expected to contract in the second quarter of 2008, said JP Morgan economist Masamichi Adachi.
"China's relatively strong domestic demand is likely to help Japan avoid a massive drop in exports," he said.
Analysts also noted, however, that many of Japan's exports to the rest of Asia are used to make products sold to the United States and Europe, so slowing growth in those markets is likely to have an indirect impact.
"Exports to Asia have started to show a sign of slowdown," noted Lehman Brothers economist Hiroshi Shiraishi. "The slowing US economy may be starting to depress demand for intermediate and capital goods from Asian countries."
Growth in Japanese exports to the rest of Asia slowed to 1.9 percent in March. Exports to the European Union rose 3.6 percent.
Rising energy prices continued to inflate Japan's imports, with oil imports up 51.6 percent by value year-on-year and liquid natural gas up 68.2 percent.
For the financial year to March, the trade surplus expanded 13.4 percent to 10.22 trillion yen, rising for a second straight year, the figures showed.
Exports rose 9.9 percent as imports increased 9.4 percent.
