Another blow for Japanese economy as exports slump further

Imports and Exports | Axonn Ltd | MIC Customs Solutions | 22 April 2020

There is no let-up in the poor trade data coming from Japan as coronavirus continues to take its toll.

There was more bad news coming from Japan this week, with new figures revealing its exports had declined by the highest figure in nearly four years during March 2020.

Demonstrating the terrible damage the coronavirus pandemic is having on the Asian nation's economy, the finance ministry suggested this could be enough to send it into its worst recession since that of the 1930s.

Following a spike in cases of COVID-19, Japanese prime minister Shinzo Abe was forced to expand the country's state of emergency last week and impose stricter lockdown measures.

Now, it has been reported that Japanese exports fell 11.7 per cent in the year to March, far more than the 10.1 per cent predicted by analysts in a Reuters poll.

Furthermore, imports decreased by five per cent as trading partners around the world brought in their own containment and lockdown measures.

Shipments heading from Japan to the US - including cars - fell by their fastest rate since 2011, and exports to China were also down 8.7 per cent.

On the whole, shipments to Asia and the European Union declined by 9.4 per cent and 11.1 per cent respectively.

Takeshi Minami, chief economist at Norinchukin Research Institute, warned: "The impact is likely to continue in April and onwards, which will prevent economic activity from normalising."

Tom Learmouth, Japan economist at Capital Economics, agreed, commenting: "Economic activity in most of Japan's major trading partners has collapsed." However, he added: "China is likely to be a rare bright spot for external demand in Q2."

Japan's Ministry of Finance had already reported last month that its exports had declined for a 15th straight month in February 2020, marking the longest run since the 23 months to July 1987, according to Refinitiv.

This was on top of previous poor figures dating back to last December, which had come as a result of ongoing spats between its trading partners.

It is hoped the postponed Olympic Games in Tokyo may hope to kick-start the economy again post-coronavirus, but the event has certainly got its work cut out.