Japan export slowdown could weigh on second-quarter GDP growth

Wed Jun 17, 2015 1:27am EDT
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By Tetsushi Kajimoto

TOKYO (Reuters) - Japan's export growth slowed for a second straight month in May, with weak external demand now threatening to erode economic growth in the current quarter.

Ministry of Finance (MOF) data showed exports grew 2.4 percent year-on-year in May, less than a 3.5 percent gain seen by economists and a 8.0 percent rise in the prior month. Compared with April, exports fell 2.7 percent.

Export growth, in tandem with domestic demand, is seen as crucial for building on the momentum evident from recent data showing stronger-than-expected economic expansion - led by corporate capital expenditure at the start of the year.

The data will be scrutinized by the Bank of Japan, which is expected to keep its monetary stimulus program unchanged at its policy review later this week, after having offered a slightly more upbeat view of the economy last month.

"Exports are undoubtedly weak and the momentum is stalling due to slowdown in China," said Takeshi Minami, chief economist at Norinchukin Research Institute.

"Exports are likely to keep a drag on economic growth, which could grind to a halt or turn negative in the current quarter given weak private consumption and external demand."


A worker walks near a container area at a port in Tokyo, February 19, 2015. REUTERS/Toru Hanai