(Bloomberg) -- Japanese exports fell for a seventh straight month in June as a slowdown in global growth and uncertainty over trade continued to buffet the world’s third-largest economy.

The value of shipments abroad dropped 6.7% in June from a year earlier, according to the finance ministry. Economists surveyed by Bloomberg had estimated a 5.4% drop. The trade balance was a surplus of 589.5 billion yen.

Key Insights

  • While the prospects for global trade improved a little after the U.S. and China reached a truce on their tariff dispute, the lack of a deal between the two economic giants continues to generate uncertainty for companies and investors
  • Japan’s restrictions on some important exports for South Korea’s tech sector is an additional risk to the trade outlook
  • The U.S. is also in talks with Japan on trade, with Tokyo keen to prevent President Donald Trump slapping tariffs on Japanese automobiles, a move that could shake up one of Japan’s biggest industries and export earners
  • A persistent drop in exports bodes ill for Japan’s economy, which needs to maintain momentum as it heads toward a consumption-sapping sales tax increase in October

What Bloomberg’s Economists Say

"Looking ahead, the truce in the U.S.-China trade war in late June reduces the immediate threat of broader U.S. tariffs on Chinese goods. A risk is that Japan’s auto sector becomes a target of U.S. protectionism. Japan’s trade dispute with South Korea is another concern."The Asia Economist TeamClick here to read more

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  • Imports fell 5.2% in June, versus economists’ median estimate of a 0.2% drop.
  • Exports to China slid 10.1% in June, while shipments to the U.S. rose 4.8%.
  • Shipments to Europe dropped 6.7%.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Paul Jackson, Henry Hoenig

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