Japan’s April exports rise on weak yen

Japan’s exports increased for the fifth straight month in April, driven by a weaker yen rather than higher demand, Reuters reported, citing a data from Ministry of Finance released on Wednesday.

The data showed exports rose 8.3 per cent year-on-year in April, falling short of analyst expectations of an 11.1 per cent gain. This positive value growth, however, masked a concerning decline in shipment volumes, which fell 3.2 per cent year-on-year for the third month in a row.

The weak yen is boosting export values, but declining volumes suggest weakening global demand, noted Takeshi Minami, chief economist at Norinchukin Research Institute. He also added that the initial spike in auto exports post-pandemic seems to be fading.

Just a week after Japan’s GDP shrank by two per cent in the first quarter, exports dropped by five per cent. The decline in exports poses a major challenge for sustainable economic growth.

Compounding the challenges, imports rose 8.3 per cent in April due to higher costs for crude oil, airplanes, and computers. This swung the trade balance into a deficit of 462.5 billion yen ($2.96 billion).