(Bloomberg) -- Japanese exports increased at a healthy rate in May, building on a strong result in April after weakness in the previous two months.
Key Takeaways
Japan’s trade recovered last year, but politics have clouded the global outlook. President Donald Trump has threatened both allies and rivals with tariffs and this month threw the Group of Seven countries into turmoil by revoking U.S. support for a joint statement after he left the leaders summit in Canada. Trump then took to Twitter to complain about countries with "Massive Trade Surpluses." Prime Minister Shinzo Abe has been walking a tightrope, trying to maintain a good rapport with Trump while pushing back against possible tariffs on vehicle imports. Exports have been a key strength for the Japanese economy amid softness in domestic demand.
Economist Takeaways
- Japan’s trade is growing, according to Rob Carnell, chief Asia-Pacific economist at ING Bank, but tariffs from the U.S. could harm trade everywhere. "It wouldn’t take a lot to see these sorts of tariffs acting as a catalyst for much weaker trade growth," he said before the data were released.
- "I think everybody should be very worried," Carnell said. "The U.S. administration is pursuing a policy which is damaging to global growth and prosperity."
- It’s easy for exports to drop in May due to a string of holidays during which businesses closed up shop, Koya Miyamae, Rina Adachi and Yoshimasa Maruyama of SMBC Nikko Securities wrote in a note before the data were released.
Other Details
- Japan’s adjusted trade balance showed a deficit of 296.8 billion yen (forecast 144.1 billion yen surplus).
- Exports to China, Japan’s largest trading partner, rose 13.9 percent in May from a year earlier.
- Those to the U.S. grew 5.8 percent.
- Shipments to the EU increased 0.7 percent.
To contact the reporter on this story: Connor Cislo in Tokyo at ccislo@bloomberg.net
To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net, Paul Jackson
©2018 Bloomberg L.P.
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