Japan’s Exports Rise Led by First Increase to US in Eight Months
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Japan’s exports rose as shipments to the US increased for the first time in eight months, offsetting a drop in flows to China and giving the Bank of Japan another reason to hike rates on Friday.Author of the article:You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Japan’s exports rose as shipments to the US increased for the first time in eight months, offsetting a drop in flows to China and giving the Bank of Japan another reason to hike rates on Friday.Subscribe now to read the latest news in your city and across Canada.Subscribe now to read the latest news in your city and across Canada.Create an account or sign in to continue with your reading experience.Create an account or sign in to continue with your reading experience.Exports overall gained 6.1% in November from a year earlier, led by semiconductor parts and medical goods, the Finance Ministry reported Wednesday. That beat economist forecasts as shipments to the US and the EU jumped 8.8% and 19.6% respectively.The rise in exports to the US bodes well for the BOJ, which is widely expected to raise the benchmark interest rate to the highest level since 1995. Uncertainties over US tariffs have been a factor that’s kept the central bank from conducting another rate hike since January, but prior signaling from the top brass has meant market participants have largely priced in another increase in borrowing costs.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.“I see the impact from US tariffs as largely settled down,” said Yutaro Suzuki, an economist at Daiwa Securities. “Shipments to America have risen in both value and volume, as companies have resumed exports following an easing of tariff uncertainties.”While trade with Washington improved, Wednesday’s data showed exports to China fell 2.4%, led by chip-making machinery and non-ferrous metals. Trade with Beijing faces a lack of clarity after a diplomatic dispute erupted last month over Japanese Prime Minister Sanae Takaichi’s comments on a hypothetical Taiwan contingency. The two sides have been embroiled in a spat since then that’s included Chinese warnings against traveling to Japan among other steps.“I don’t expect the negative impact of worsening Japan-China relations to appear in trade in a significant way going forward,” said Suzuki. “Rather, exports to China are likely to move more in line with China’s economic fundamentals.”China’s investment slumped further in November and retail sales expanded at their weakest pace since the crash caused by Covid, pointing to further deflationary pressure.Overall, Japan’s trade balance was in the black on an unadjusted basis, with a ¥322.3 billion ($2.1 billion) surplus. Imports rose 1.3%, slightly below a consensus estimate.Japan’s trade surplus against the US was ¥739.8 billion, increasing by 11.3% from a year ago. The balance has been in the black nonstop since US President Donald Trump began his second term in January, meaning the trade imbalance has stayed in place despite the president’s efforts to close the gap with higher tariffs. Exports of Japanese cars and their parts to the US rose in November after Washington reduced its tariffs on them to 15% from 27.5% in mid-September. The US has also set the levy on many other products at the same rate. The value of car shipments to America increased 1.5% while the number of exported units jumped by 7.7%. That difference has been an ongoing pattern that suggests Japanese automakers are sacrificing profits by cutting prices in order to preserve market share.Still, the unit price of Japanese cars shipped to the US last month was around ¥4.08 million, roughly the same level as in April when Trump’s tariffs were first announced.The US and Japan are set to review energy projects as the potential debut investments in a landmark $550 billion joint fund that was a centerpiece of their trade deal, according to people familiar with the matter. In October the two sides unveiled a list of potential projects during Trump’s visit to the region.“Exports turned out fairly strong in November,” said Suzuki. “External demand in the October to December quarter could be one factor supporting the Japanese economy.”—With assistance from Takashi Umekawa.(Updates with economist comments, more details from report.)Postmedia is committed to maintaining a lively but civil forum for discussion. 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