Japan's exports extend double-digit declines as pandemic hits demand
Japan's exports posted a double-digit slump for a sixth straight month in August as U.S.-bound shipments shrank due to a global demand slowdown from the coronavirus pandemic, casting a shadow over a trade-led recovery from the deep recession.
The export decline highlights the immense task Yoshihide Suga, who is assured to be elected prime minister later on Wednesday, faces in driving an economic recovery.
Total exports fell by 14.8 percent year on year in August, a smaller decline than the 16.1 percent expected by economists in a Reuters poll, official data showed on Wednesday.
That meant exports fell for their 21st straight month, marking the longest run of declines since a 23-month run through July 1987. That followed a 19.2-percent drop in the previous month.
The decline in August was driven by fewer shipments of cars and mineral fuels, though the pace of contraction eased somewhat from July as economic activity showed signs of picking up.
"Strong demand for ICT technology linked to working from home resulted in exports of electric machinery only falling 5.5 percent year on year," said Tom Learmouth, Japan economist at Capital Economics.
"However, export volumes may not reach pre-virus levels until early-2022," he said in a note.
Suga, who won a ruling Liberal Democratic Party (LDP) leadership election on Monday, will face a huge challenge to get the economy back on track after it posted its worst postwar contraction in the second quarter.