Japan’s exports likely fell for the first time in 15 months in May due to stagnant demand overseas, and with imports expected to rise the trade balance will probably remain in deficit, where it has been for nearly two years, a Reuters poll showed.
In addition to weak demand from emerging nations, the benefit of a weak yen for exports appeared to have run its course.
The Reuters poll of 28 economists forecast exports to show a 1.2 percent fall in the year to May, which would be the first decline since a 2.9 percent fall in February last year.
In April, Japan’s exports rose 5.1 percent from a year earlier.
The poll forecast a 1.7 percent increase in imports in May, largely led by higher demand for liquid natural gas.
The trade deficit was forecast at 1.17 trillion yen. It would be 23rd straight monthly deficit.
“Shipments to Europe are expected to stay solid, but those to Asia will probably continue to be stagnant. In addition, exports to the U.S. are slow,” Takeshi Minami, chief economist at Norinchukin Research Institute, said.
Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute Said he expected the trade deficit to shrink over the summer, but a return to surplus was some way off.
“We expect the nation’s exports will pick up around July-September, led by recovering demand from the U.S.,” Shinke said.
“But if exports continue to stay tepid, this could raise a possibility that the economic recovery may undershoot.”
Japan’s economy grew in the first quarter at the fastest pace since the third quarter of 2011 thanks to a surge in capital spending and strong consumer spending.
The Ministry of Finance (MOF) will announce the trade data on June 18 at 8:50 a.m. (June 17 at 2350 GMT).
The Bank of Japan on Friday kept monetary policy steady and revised up its assessment of overseas economies. BOJ officials saw overseas headwinds receding as China’s exports rebound and as the U.S. economy recovers from a severe winter. (Reuters)