Japan’s Exports Record The First Annual Increase in Two Years

Government data revealed that Japanese exports rose for the first time in two years in December, driven by shipments to China, providing a glimmer of hope for policymakers who are counting on an export-led recovery amid an increase in coronavirus cases.

A recovery in exports may ease the risk of another recession after a recovery period, while the Bank of Japan is expected to update its growth forecast for the next fiscal year in its review of interest rates that ended Thursday. The central bank is expected to keep its policy unchanged.

Data from the Ministry of Finance revealed today, Thursday, that Japanese exports increased 2% in December on an annual basis, which is slightly less than the 2.4% increase that experts expected, but it represents an increase compared to a decrease of 4.2% in the previous month, and this is the first increase on the basis of Annual since November 2018.

In a worrying sign, auto exports fell 4.2% from the start of the year to December, as shipments to the European Union fell 32.2%. The decline comes as car makers such as Toyota Motor and Nissan Motor are set to reduce their car production this month due to a shortage of semiconductors after demand recovers from the Corona crisis.

The data revealed that Japanese auto exports fell in the whole of 2020 by 20%, in the biggest decline since shipments halved during the global financial crisis in 2009, which is the main factor contributing to the overall decline in annual exports by 11.1%.