MNI BRIEF: Japan July Exports Post 3rd Straight Drop

Japan’s exports fell for the third straight year-on-year drop in July, down 2.6% after June’s 0.5% decline, as U.S. tariffs hit shipments of automobiles and iron, and steel products, Ministry of Finance data showed Wednesday.

Automobile exports slid 11.4% in July, the fourth consecutive fall after -7.3% in June, following front-loaded shipments earlier this year. Exports of iron and steel products dropped 21.0% after June’s 13.2% fall.

Imports declined 7.5% in July, the first fall in two months after June’s 0.3% gain. 

Japan posted a trade deficit of JPY117.5 billion, reversing a JPY152.1 billion surplus in June.

Exports to China, Japan’s largest trading partner, fell 3.5%, the fifth consecutive drop after a 4.7% decline in June, reflecting its weaker economy. 

Exports to the U.S. fell 10.1%, also the fourth straight decline, with automobile exports down 28.4% after -26.7% in June, extending the payback from front-loaded shipments in March and April.

The data is unlikely to prompt the Bank of Japan to change its view that exports remain broadly flat as a trend, though officials remain focused on the impact of tariffs on trade and production. (See MNI BOJ WATCH: Ueda Says To Gradually Raise Rates)