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Japan Today
10 hours ago
- Automotive
- Japan Today
Japan logs ¥637.6 bil trade deficit in May on weak U.S. exports
Japan logged a 637.61 billion yen ($4.38 billion) trade deficit in May, with auto-related shipments to the United States plunging, possibly affected by higher tariffs imposed by President Donald Trump, government data showed Wednesday. The trade balance remained in the red for the second straight month, as overall exports fell 1.7 percent from a year earlier to 8.13 trillion yen, marking the first drop in eight months, weighed down by an 11.1 percent fall in shipments to the United States. Imports shed 7.7 percent to 8.77 trillion yen, down for the second straight month, reflecting lower prices of crude oil from the United Arab Emirates and coal from Australia, the Finance Ministry said in a preliminary report. By region, Japan had a 451.7 billion yen trade surplus with the United States, down 4.7 percent from the previous year, as exports dropped for the second consecutive month to 1.51 trillion yen, while imports fell 13.5 percent to 1.06 trillion yen. U.S.-bound shipments of automobiles tumbled 24.7 percent and those of auto parts plunged 19.0 percent, both in value terms. In volume, shipments of automobiles fell 3.9 percent, showing that export unit prices declined by over 20 percent. The Trump administration imposed a 25 percent tariff on imported vehicles in April as well as on auto parts in May, in a move set to deal a blow to Japan's mainstay auto sector, which sees the United States as a key market. A ministry official said the latest data could have reflected moves by Japanese automakers to increase shipments of lower-priced models or cut export prices of their products in response to heavier tariffs. "I believe the effects of the tariffs are gradually emerging, as car exports also declined in volume terms," said Takafumi Fujita, an economist at the Meiji Yasuda Research Institute. Fujita said auto exports are likely to remain weak due to the uncertain outlook of Japan-U.S. tariff negotiations and they could negatively affect the Japanese economy, given the significant role of the industry. With China, Japan remained in the red for the 50th consecutive month, logging a deficit of 624.87 billion yen in the reporting month, expanding 17.2 percent from the year before. Exports to the country shed 8.8 percent to 1.44 trillion yen and imports fell 2.2 percent to 2.07 trillion yen. Japan's trade surplus with the rest of Asia, including China, ballooned more than 12-fold to 313.35 billion yen. A deficit of 308.9 billion yen was recorded with the European Union, remaining in the red for 16th consecutive month. © KYODO
Gulf Today
02-04-2025
- Business
- Gulf Today
Japan business mood slumps to 1-year low on Trump tariff fears
Big Japanese manufacturers' business sentiment worsened to a one-year low in the three months to March, a central bank survey showed on Tuesday, a sign escalating trade tensions were already taking a toll on the export-reliant economy. The gloom contrasted with big non-manufacturers' mood, which improved to levels unseen since 1991 on booming profits from inbound tourism and the pass-through of costs via price hikes. However, both manufacturers and service-sector firms expect business conditions to stagnate or worsen three months ahead as soft global demand, rising costs and uncertainty over US tariffs cloud the outlook, the quarterly 'tankan' survey showed. The survey, compiled before US President Donald Trump's announcement last week of a plan to impose tariffs on auto imports, highlights how external headwinds are complicating the BOJ's decision around the timing of further interest rate hikes. 'Companies haven't fully priced in the impact of US tariffs, which is causing a sense of alarm but not directly hitting their profits yet,' said Kazutaka Maeda, an economist at Meiji Yasuda Research Institute. 'With firms offering solid wage hikes and no major surprises coming out from the tankan, the BOJ likely won't change its stance of steadily raising interest rates,' he said. The headline index measuring big manufacturers' business confidence stood at plus 12 in March, down from plus 14 in December and matching a median market forecast, the tankan survey showed. It worsened for the first time in four quarters and hit the lowest level since March 2024 with sentiment among steel and machinery makers deteriorating amid weak overseas demand, rising raw material costs and uncertainty over US tariffs. Aside from the external headwinds, the tankan painted a not-so-gloomy picture in some key areas, with capital expenditure holding up and price hikes underpinning corporate profits. An index gauging big non-manufacturers' sentiment increased to plus 35, the highest level since 1991 when Japan's economy was experiencing an asset-inflation bubble. This compared with plus 33 in December and a median market forecast of plus 33. Big companies expect to increase capital expenditure by 3.1 per cent in the current fiscal year ending in March 2026, above a market forecast for a 2.9 per cent rise. More firms saw output prices rise while they expect inflation to hit an average 2.4 per cent three years from now, the highest on record, underscoring mounting inflationary pressure that may justify further rate hikes. Marcel Thieliant, head of Asia-Pacific at Capital Economics, said the survey suggested that 'an increasingly overheating economy is creating strong price pressures.' 'With inflation set to overshoot the BOJ's forecasts and the tankan suggesting that price pressures will remain strong, we think there's a strong case for a rate hike at the bank's next meeting in May.' The tankan will be among key factors the BOJ will scrutinise at its next policy-setting meeting on May 1, when it will also release fresh quarterly growth and price forecasts. Companies surveyed likely took into account Trump's decision in February to raise tariffs on imports of steel and aluminium to a flat 25 per cent. But most of them likely replied before Trump's announcement last week of a plan to impose tariffs on auto imports. He has also pledged to announce reciprocal tariffs on Wednesday targeting all countries. The tankan was compiled in a period between Feb. 26 and March 31 with 70 per cent of firms sending replies by March 12. Reuters
Japan Times
19-03-2025
- Business
- Japan Times
Japan's exports rose more quickly in February ahead of Trump tariffs
Japan's exports have risen at a faster pace as businesses increased orders ahead of the rollout of higher tariffs in the United States. Exports measured by value gained 11.4% in February from a year earlier, the Finance Ministry reported Wednesday. Exports slightly missed the median estimate of a 12.6% increase. Imports fell 0.7%, compared with the median estimate of a 0.8% gain. Japan's trade balance switched back into the black, with a surplus of ¥584.5 billion ($3.9 billion). Trade helped Japan's economy grow in the last quarter of 2024 as net exports rose, and shipments abroad have advanced in the first two months of this year. Part of that bump reflected efforts to front-load exports to get ahead of new tariffs in the U.S. "I think that some of the growth in exports may be due to a rush of orders before the (U.S. President Donald) Trump tariffs came,' said Yuichi Kodama, economist at Meiji Yasuda Research Institute. "But it's not clear to what extent this was the case. It's worth noting that exports to the U.S. fell in terms of volume.' By region, shipments to the U.S. rose 10.5% by value and slipped by 3.3% in terms of volume. Those to China increased 14.1%, likely boosted by the Lunar New Year effect, while exports to Europe fell 7.7%. Global trade flows now face potential major disruptions as U.S. President Donald Trump continues to escalate his tariff campaign, targeting nations including Canada and Mexico, where Japanese carmakers have major manufacturing bases. The renewed trade war between Washington and Beijing also risks having a ripple effect on Japan, which counts on the two nations as its biggest trading partners. The OECD cut its world growth forecast on Monday to 3.1% for 2025 to account for turbulence weighing on global commerce. "I don't think overseas demand is that strong,' Kodama said. "Exports are growing in value terms mainly due to the impact of exchange rates, but growth in volume is slow, so it remains to be seen whether this strength will continue.' The yen averaged ¥154.61 per dollar in February, 4.3% weaker than a year earlier, the Finance Ministry said. Japan has so far failed to get an exemption from direct levies from the Trump administration, despite a seemingly positive meeting between the two nations' leaders in February. Trade minister Yoji Muto's pleas to senior officials in Washington this month apparently went unheeded. Fresh tariffs on steel and aluminum started hitting the Asian nation last week, and its manufacturers face the prospect of reciprocal tariffs on a variety of sectors plus a 25% auto levy set to start in early April. To lower the impact from any tariffs imposed by Trump, Japanese companies are already stockpiling goods in the U.S., according to a survey by Bloomberg News. Cars, semiconductor manufacturing equipment and chips led the advance in exports in February, while declining imports of crude oil and coal were among components weighing on imports. Japan's trade surplus with America was ¥918.8 billion in February, up 29% versus a year earlier. Auto shipments to the U.S. rose almost 14%. Trump has long criticized the U.S. trade deficit with Japan, and the president recently accused Japan and China of gaining an unfair advantage through foreign exchange policy, which Japan has denied. The U.S. has also historically criticized road safety standards in Japan as a nontariff barrier that restricts U.S. automakers' exports to Japan.
Yahoo
01-03-2025
- Business
- Yahoo
Core inflation in Japan's capital slows but stays above BOJ target
By Makiko Yamazaki and Satoshi Sugiyama TOKYO (Reuters) -Core consumer prices in Japan's capital rose 2.2% in February from a year earlier, data showed on Friday, slowing for the first time in four months due to revived energy subsidies but remaining well above the central bank's 2% target. The persistently high inflation will likely support the case for the central bank to continue its monetary policy tightening campaign. "The slowdown mainly reflect reinstated subsidies to curb electricity and gas bills, but the underlying trend hasn't changed with food prices remaining high," said Kazutaka Maeda, an economist at Meiji Yasuda Research Institute. "This underlying trend will justify further rate hikes by the BOJ," he added. The increase in the core consumer price index (CPI), which excludes volatile fresh food costs, was slower than a median market forecast of 2.3% and a 2.5% gain in January. A separate index that strips away the effects of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, rose 1.9% in February from a year earlier, advancing at the same pace as the previous month. The Tokyo inflation figures are considered a leading indicator of nationwide trends. The government in January reinstated electricity and gas subsidies, which was reflected in bills this month. Upward price pressure could pick up again in a few months as the government plans to phase out the subsidies by the end of March. Prices of food have also soared in recent months, prompting the government to order a release of stockpiled rice to farm cooperatives to bring down costs. The yen's recent strength may help push down import costs, but it usually takes a few months for foreign exchange rate movements to be reflected in prices. Meanwhile, Tomoyuki Ota, chief economist at Mizuho Research & Technologies, noted that non-public service prices have been slow to rise. "This shows that higher labour and energy costs have not been fully passed onto prices," he said. Services prices in non-public sectors rose 0.8% year-on-year in February, slower than a 0.9% gain in January. Separate data from the Ministry of Economy, Trade and Industry showed Japan's factory output fell 1.1% in January from the previous month, roughly in line with a median market forecast for a 1.2% decline. Manufacturers surveyed by the ministry expect seasonally adjusted output to increase 5.0% in February and fall 2.0% in March. The BOJ ended a decade of massive monetary stimulus last year and raised its short-term interest rate to 0.5% from 0.25% in January on the view that Japan was on the cusp of sustainably hitting its 2% inflation target. BOJ Governor Kazuo Ueda has said the central bank will keep raising interest rates if Japan makes continued progress in durably achieving 2% inflation, solid wage growth and domestic demand. Sign in to access your portfolio
Reuters
28-02-2025
- Business
- Reuters
Core inflation in Japan's capital slows but stays above BOJ target
TOKYO, Feb 28 (Reuters) - Core consumer prices in Japan's capital rose 2.2% in February from a year earlier, data showed on Friday, slowing for the first time in four months due to revived energy subsidies but remaining well above the central bank's 2% target. The persistently high inflation will likely support the case for the central bank to continue its monetary policy tightening campaign. "The slowdown mainly reflect reinstated subsidies to curb electricity and gas bills, but the underlying trend hasn't changed with food prices remaining high," said Kazutaka Maeda, an economist at Meiji Yasuda Research Institute. "This underlying trend will justify further rate hikes by the BOJ," he added. The increase in the core consumer price index (CPI), which excludes volatile fresh food costs, was slower than a median market forecast of 2.3% and a 2.5% gain in January. A separate index that strips away the effects of both fresh food and fuel costs, closely watched by the BOJ as a broader price trend indicator, rose 1.9% in February from a year earlier, advancing at the same pace as the previous month. The Tokyo inflation figures are considered a leading indicator of nationwide trends. The government in January reinstated electricity and gas subsidies, which was reflected in bills this month. Upward price pressure could pick up again in a few months as the government plans to phase out the subsidies by the end of March. Prices of food have also soared in recent months, prompting the government to order a release of stockpiled rice to farm cooperatives to bring down costs. The yen's recent strength may help push down import costs, but it usually takes a few months for foreign exchange rate movements to be reflected in prices. Meanwhile, Tomoyuki Ota, chief economist at Mizuho Research & Technologies, noted that non-public service prices have been slow to rise. "This shows that higher labour and energy costs have not been fully passed onto prices," he said. Services prices in non-public sectors rose 0.8% year-on-year in February, slower than a 0.9% gain in January. Separate data from the Ministry of Economy, Trade and Industry showed Japan's factory output fell 1.1% in January from the previous month, roughly in line with a median market forecast for a 1.2% decline. Manufacturers surveyed by the ministry expect seasonally adjusted output to increase 5.0% in February and fall 2.0% in March. The BOJ ended a decade of massive monetary stimulus last year and raised its short-term interest rate to 0.5% from 0.25% in January on the view that Japan was on the cusp of sustainably hitting its 2% inflation target. BOJ Governor Kazuo Ueda has said the central bank will keep raising interest rates if Japan makes continued progress in durably achieving 2% inflation, solid wage growth and domestic demand.
