Japan’s Exports Drop further in April adding to a Gloomy Outlook
Japan's economy marked its seventh consecutive month of drop in exports in April. The data released officially on Monday added to the gloomy outlook of the third-largest economy of the world.
There was a 10.1 percent drop in exports in year-on-year basis in April which matched the estimates. It was worse compared to the drop of 6.8 percent in the previous month. That makes April's decline the fastest in the past three months. Imports were no better as it dropped twenty three percent in a yearly basis. The expectations were a nineteen percent drop. In March the drop in imports were14.9 percent which was outstripped by the slide in April.
The trade surplus of the country was 823 billion yen or $7.48 billion lower than what was estimated by Reuters at surplus of 492.8 billion yen.
According to several economists the appreciating yen is responsible for the performance in April. The currency has climbed ten percent vs. the dollar since this year's beginning. That added to the reduction in the value of earnings for those companies that are export-oriented.
In case a nation's exports surpass its imports, theoretically higher demand for its goods also increases demand for its currency and Japan's case fits well here.
Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo said, "The April trade surplus was due in large part to weak imports. Still, the data was enough to trigger yen buying."