Japanese exports land for the fourth month in a row

Japan exports

Data issued by the Japanese Ministry of Finance showed on Wednesday that exports fell 0.1 percent on an annual basis in August led by cars and steel, to record a decrease for the fourth month in a row, indicating that the customs duties imposed by US President Donald Trump continues to give ambiguity to global trade prospects, especially trade with the United States.

The increase in shipments to Asia and the European Union helped reduce this decrease.

Economists had polled their opinions, expecting exports to a decrease in 1.9 percent.

At the same time, Japan has witnessed the largest decrease in the value of shipments to the United States for more than four years.

Imports fell 5.2 percent in August compared to the same month last year.

As a result, the trade balance recorded a deficit of 242.5 billion yen ($ 1.66 billion) compared to an expected deficit of 513.6 billion yen.

This recent decline in Japan’s exports comes as companies around the world continue to accommodate Trump’s commercial policies. For the export dependent Japan, these commercial strikes threaten their fragile growth, and the positive course may hinder inflation, increase wages and growth that the authorities seek to achieve.

“With the new American tariff on cars and other goods by 15 percent, the question remains about how Japanese companies respond in the future. Companies outside the auto sector may try to absorb the impact of acquaintances by reducing costs, and if that happens, the profit will decrease, which presses small and medium companies and it is difficult

The decrease in the total exports led to the decline in the values ​​of shipments to the United States by 13.8 percent. While exports to China decreased by 0.5 percent, and exports to Europe increased by 5.5 percent.

High American recognition continues to disrupt global trade, despite recent agreements. In late July, the United States agreed to reduce the tariffs on imported Japanese cars to 15 percent instead of 27.5 percent, and to refrain from imposing previous definitions over the new tariff, but these changes did not come into effect until September 16.

In August, the United States remained the largest destination for Japan’s exports after China, as the value of car shipments to America decreased by 28.4 percent, while the number of units decreased by 9.5 percent, indicating that Japanese companies are lowering prices to maintain their share in the American market, which reduces the margins of their profits and affects their ability to continue to raise wages at the same rate for the past two years.

This decline in corporate finances may be a challenge to the Japan Bank in its endeavor to gradually raise the reference interest rate. The growth of strong wages was a major element behind the bank’s steps towards normalizing monetary policy, and with the continued inflation at or above the target of 2 percent for more than three years, speculation continues to raise interest.

With regard to steel exports to the United States, which faces 50 percent definitions, its value has decreased by 26.2 percent, but witnessed an increase in size, indicating the absorption of some effects by reducing prices. Semiconductor exports also decreased by 12.4 percent and 12.8 percent, respectively. Under the July Agreement, the United States granted Japan a item to protect the future of sectoral recognition, which means that Japan is not treated more cruel than any other country.