Japan’s Exports Tumbled 35.7% in July

Japan’s exports fell for a tenth straight month in July as demand from all of the nation’s major markets deteriorated.

Shipments abroad tumbled 36.5 percent from a year earlier, steeper than June’s 35.7 percent drop, the Finance Ministry said in Tokyo.

Manufacturers are still reeling from plunging sales of cars and electronics even as the economy emerges from its worst postwar recession. Toyota Motor Corp., Japan’s largest carmaker, said today it will cut domestic production by 220,000 vehicles.

Exports may also have been eroded by the yen’s 1.7 percent advance against the dollar in July from June. A stronger yen cuts into exporters’ profits when they are repatriated back into local currency.

Declines in shipments accelerated in all major regions: Exports to China fell 26.5 percent, shipments to the U.S. slid 39.5 percent and those to Europe slumped 45.8 percent, according to today’s report.

Japan’s gross domestic product grew an annualized 3.7 percent last quarter, the first expansion in more than a year, as governments worldwide poured more than $2 trillion into their economies to spur demand.

Prime Minister Taro Aso is struggling to cement an economic recovery as his ruling Liberal Democratic Party trails the opposition Democratic Party of Japan in polls ahead of an Aug. 30 election.

Toyota, which is shutting down an assembly line at its Takaoka plant in central Japan, and Nissan Motor Co. led a ninth straight drop in domestic auto production in June as exports to the U.S. plummeted, according to the Japan Automobile Manufacturers Association.

Nippon Steel Corp., the world’s second-largest steelmaker, last month widened its first-half loss forecast by 33 percent.

China’s economy expanded 7.9 percent last quarter, rebounding from the weakest growth in almost a decade. The nation’s 4 trillion yuan ($585 billion) stimulus to encourage consumer spending and investment in building projects has benefited Japanese manufacturers.

Japan’s Exports Tumbled 35.7% in July

TradingEconomics.com, Bloomberg
8/25/2009 11:34:38 PM