TOKYO (Reuters) – Japan’s exports likely contracted at the fastest pace in more than three years in August, a Reuters poll showed on Friday, indicating increasing pressure on shipments as the economy is being hit by the U.S.-China trade war and slower global growth.
Adding to the challenges policymakers face, Japan’s core consumer inflation is seen in the poll as slipping to the lowest level in more than two years, largely thanks to weaker energy prices.
Exports - August - % - Year - Shrinkage
Exports in August are forecast to have slumped 10.9% from a year earlier, which would be the biggest shrinkage since 14.0% in July 2016 and a far sharper one than July’s 1.5% drop.
An August contraction would also extend the streak of declines that began in December to a ninth month.
Economies - Japan - Pain - US-China - Trade
Many export-reliant economies such as Japan have felt the pain from the U.S.-China trade dispute, which has already led to a slowdown in manufacturing activity and is seen weighing on Japanese business spending and earnings.
“Weak demand due to an overseas economic slowdown especially centered on China pushed down both export volumes and prices,” said Kenta Maruyama, economist at Mitsubishi UFJ Research and Consulting.
Poll - Imports - % - August - Year
The poll also forecast that imports would fall 11.2% in August from a year earlier, likely indicating the trade deficit widened to 355.9 billion yen ($3.29 billion) from a revised 250.7 billion yen deficit the previous month.
Maruyama said he expects imports to find some support in September due to “pent-up demand ahead of a sales tax hike in October”.
Oct - Japan - Sales - Tax
On Oct. 1, Japan’s sales tax...
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