TOKYO- Japan’s exports marked a fifth straight month of double-digit growth in July, driven by US-bound shipments of automobiles in a positive sign for a trade-led economy, although a key gauge of capital spending fell for the first time in four months.
The mixed batch of indicators underscored fragility in the world’s third-largest economy, which grew 1.3 percent in the April-June quarter due to solid exports and a surprise gain in private consumption.
However, prolonged coronavirus curbs on bars, restaurants and other face-to-face service sector businesses cloud the outlook, piling pressure on Prime Minister Yoshihide Suga to deploy another big stimulus package. .
Ministry of Finance data out on Wednesday showed Japanese exports grew 37.0 percent year-on-year in July, a tad slower than a 39.0 percent increase expected by economists in a Reuters poll, although the gain was exaggerated by the contrast to the prior year’s COVID-induced slump.
It followed a 48.6 percent growth in the prior month.
“Exports remained in an uptrend, which will continue in the coming months even though car production may face supply constraint due to chip shortages,” said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities.
“Although the service sector may take a hit from a prolonged COVID pandemic, corporate capital spending and output will stay on firm footing,” he said. — Reuters
