|Shinzo Abe, Japan's prime minister, at a ceremony for the War Dead, Aug 15, 2015 |
Japan Wednesday reported its biggest trade deficit since February, as exports slowed and the decline in imports widened. On Monday Japan reported that GDP shrunk in the second quarter — the yen has fallen 33% against the US dollar since early 2013 when the Bank of Japan began a massive programme of quantitative easing (bond buying in the market commonly known as money printing).
Export growth fell from a 9.5% year-on-year rate in June to a 7.6% rate while imports contracted by 3.2% after a 2.9% drop in June. July export volume edged up 0.3% from June, after a 2.3% rise in June.
Demand in Europe accounted for most to the gain, with exports volume rising 2.1%. Exports to the US gained 0.7%, while those to China and the rest of Asia weakened by 0.6% and 0.9% respectively.
However, exports fell 0.7% on a volume basis from June 2014 amid a slowdown in the Chinese and other emerging economies.
"As for automobile-related exports, they have not been doing well in recent months on a volume basis compared with a year ago," a finance ministry official said, according to Kyodo News.
While Japan had a goods trade deficit for the fourth month in a row in July but the value shrank 72.3% from a year earlier to ¥268.1bn ($2.2bn), the government said, as imports were pushed down by declining crude oil prices.
Gross domestic product fell an annualised 1.6 % in the second quarter from January-March, ending two quarters of growth, the Cabinet Office said Monday.
Growth in the first quarter of 2015 was revised upward to 4.5% on an annualised basis, following 1.4% annualised growth in the fourth quarter of 2014. However, those two quarters of growth followed two quarters of shrinkage.
Reuters says Japan's economy grew just 2% since Shinzo Abe took office as prime minister in December 2012, even as he deployed fiscal stimulus roughly equal to 3% of GDP.
"The effect of Abenomics hasn't expired, but the policy steps haven't boosted wages enough to meet rising living costs," said Yuichiro Nagai, an economist at Barclays Capital Japan.