apan’s exports bounce back in January, but manufacturers’ outlook remains gloomy

apan’s exports bounce back in January, but manufacturers’ outlook remains gloomy

Japan’s exports rebounded more than expected in January, boosted by strong demand from the United States and China for cars, car parts, and chip-making equipment, according to the Ministry of Finance data. Japan’s exports rose 11.9% in January from the same month a year ago, faster than a 9.5% gain expected by economists in a Reuters poll. This was also a 9.7% increase from the previous month.

 

Workers walk in a container area at a port in Tokyo, Japan January 25, 2016.

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The robust exports could ease some concerns about further economic decline as the Reuters Tankan survey showed manufacturers’ business morale soured sharply, with pessimists outnumbering optimists for the first time in 10 months. The batch of indicators followed data last week that showed Japan unexpectedly tipping into recession in the fourth quarter and losing its spot as the world’s third-largest economy to Germany.

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The trade data also showed imports fell 9.6%, versus the median estimate for a 8.4% decrease. The trade balance came to a deficit of 1.758 trillion yen ($11.73 billion), versus the median estimate for a deficit of 1.926 trillion yen.
The worsening factory sector mood added to concerns about broader economic weakness, as Japan faces challenges such as rising energy costs, supply chain disruptions, and labor shortages.

Speculation has grown since last year that the Bank of Japan may exit its negative interest rates policy as early as March or April, if wage and price growth picks up enough. However, recent weak data has stoked worries Japanese firms may become reluctant to boost wages enough to achieve stable and sustainable inflation in a country that has been mired in a deflationary mindset for more than a decade.

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Source : REUTERS

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