According to government data, Japan’s exports and imports for May recorded the biggest drop since the global financial crisis. Domestic and overseas demand is dwindling as economic activity around the world slows down as a result of the coronavirus pandemic.
Reduction in exports and imports
Exports fell 28.3 per cent to ¥4.18 trillion compared with the same time last year. The figure marks the largest drop since September 2009 when exports suffered a decline of 30.6 per cent. Japanese exports are seeing their 18th consecutive month of declining figures.
Imports have also dropped 26.2 per cent to ¥5.02 trillion, again marking the steepest reduction since the global economic crisis which saw a decline of 35.5 per cent. The May report reveals that this is 13th month in a row where Japan’s figures are down.
However, in April, Japanese imports recorded only a slight fall of 7.1 per cent as purchases from China increased once it began reopening its economy following the first outbreak of the coronavirus in Wuhan.
Exports to China, Japan’s largest trading partner, went down 1.9 per cent to ¥1.13 trillion as the need for items such as chemical raw materials, cars and chip-making equipment decreased
Trade with major trading partners
Japanese exports to the United States were down by 50.6 to ¥588.42 billion, with exports of auto parts tumbling 73.2 per cent. The USA has been the hardest hit country in relation to COVID-19 cases and deaths and has seen strict lockdown measure across its major cities over the last couple of months.
Imports from the United States in May amounted to ¥578.16 billion, a decline of 27.5 per cent.
Exports to China, Japan’s largest trading partner, went down 1.9 per cent to ¥1.13 trillion as the need for items such as chemical raw materials, cars and chip-making equipment decreased.
A lack in demand for products such as clothing saw imports from China fall 2.0 per cent to ¥1.51 trillion compared to an increase of 11.8 per cent recorded in April. As a result, Japan ended up with a ¥385.07 billion trade deficit with its Chinese neighbour.
Markets drop in other countries around the world
Looking at Asia overall, Japan had a trade surplus of ¥5.88 billion, though exports were down 12.0 per cent to ¥2.74 trillion and imports had fallen 11.8 per cent to ¥2.74 trillion. Demand for petroleum product imports from South Korea nosedived and steel exports to Thailand declined.
With most countries in Europe under varying levels of lockdown, Japan’s exports to the EU dropped 33.8 per cent to ¥363.84 billion while imports declined 29.6 per cent to ¥575.17 billion, resulting in a ¥211.33 billion trade deficit.
Do you think Japan’s exports and imports will drop further in the coming months? Share you thoughts in the comments section.
"Otsumami" - a bite size snack:
With world economies now reopening, hopefully Japan will see its exports and imports begin to rise in the coming months.