Japan’s export growth accelerated to the fastest pace since 2022 on robust demand for chips and cars and was helped by the yen’s dip to its weakest level in 40 years.
The value of exports rose 23.2% in July from a year earlier, accelerating from a 19.3% gain in June, the Finance Ministry reported Thursday. The result compared with economists’ median forecast of a 20.1% increase. It was the fastest advance since October 2022.
Imports rose 27.8%, faster than the previous month’s 25.4% gain and economists’ estimate of a 25.1% increase. The trade deficit widened to ¥634.5 billion on an unadjusted basis from a revised ¥409.9 billion deficit in June, marking a third straight month in the red.
The data show that Japan’s manufacturers have largely managed to navigate the fallout from the Middle East conflict so far, an encouraging sign for Japan’s economy after growth fell short of expectations in the three months through June due to lackluster domestic demand.
The weak yen boosted the value of shipments and has been a factor supporting businesses by making their products more competitive in overseas markets. The currency touched its weakest level against the dollar in 40 years in July. The yen traded at an average 161.83 versus the dollar, 11.2% weaker than a year earlier, the ministry said.
Robust on global demand for artificial intelligence was among the key drivers of the latest advance. Outbound shipments of electronic components including semiconductors increased about 49%. Other gainers included passenger cars, which rose 21%.
By destination, shipments to the US increased 22%, while those to China and Europe climbed 25.8% and 19.1% respectively.Also Read: NSE IPO DRHP may get SEBI nod in two weeks: Sources — Check likely timeline, price band