By Makiko Yamazaki
TOKYO- Japan’s exports expanded faster than expected in October, led by a pick-up in chip equipment demand in China, though fears persist over potential US protectionist trade policies that could hamper future shipments.
Japanese businesses are weighing the impact of new and potentially hefty tariffs promised by US President-elect Donald Trump that could disrupt international trade.
Total exports in October rose 3.1 percent from a year earlier, data from the Ministry of Finance showed on Wednesday, rebounding from a 1.7 percent drop in September and outpacing a median forecast in a Reuters poll of a 2.2 percent increase.
Exports to China led the recovery with a 1.5 percent gain due to strong demand for chipmaking equipment, while those to the United States, Japan’s largest export destination, were down 6.2 percent on weak auto shipments, the data showed.
Kazuma Kishikawa, economist at Daiwa Institute of Research, warned that global demand remains weak. “In particular, US bound shipments are likely to take months to recover as it would take time for interest rate cuts to start to lift the economy,” he said.
Imports in October grew 0.4 percent from a year earlier, compared with market forecasts for a 0.3 percent decrease.
That resulted in a trade deficit of 461.2 billion yen ($2.98 billion) in October, compared with the forecast of a deficit of 360.4 billion yen.
Shunsuke Kobayashi, chief economist at Mizuho Securities, estimated that a proposed 10 percent tariff on all US imports could push down Japan’s gross domestic product by 0.13 percent, and another 0.12 percent if a potential 60 percent levy on Chinese-made products triggers retaliatory tariffs from China.
“Trump’s policy pledges, if implemented, could affect Japan through various channels and increase uncertainties, which in turn make Japanese businesses cautious about fresh investments,” a government official said on condition of anonymity. – Reuters
