TOKYO: Japan's exports in September fell at a slower pace than in the previous six months as US-bound shipments of cars started to recover from COVID-19 lows, suggesting the pandemic's pressure on the economy was easing.
The slower decline in exports added to signs that the world's third-largest economy has started to gradually rebound from the shock of the health crisis after bottoming out.
Total exports lost 4.9 per cent year-on-year in September, data released on Monday (Oct 19) showed, a larger decline than the 2.4 per cent drop expected by economists in a Reuters poll. That still meant the pace of contraction in exports eased following six months of double-digit declines, including a 14.8 per cent drop in the previous month.
Exports fell for their 22nd straight month, marking the longest run of declines since a 23-month run through to July 1987, driven by fewer exports of iron to Taiwan and ships to Panama.
"We think (exports) should return to pre-virus levels before the end of the year," said Marcel Thieliant, Japan economist at Capital Economics.
"However ... we only expect imports of goods and services to return to pre-virus levels by end-2022."
A Reuters poll last Friday showed analysts think the government of Prime Minister Yoshihide Suga should compile a third extra budget for the current fiscal year to further support the economy.
Japan has already announced US$2.2 trillion across two stimulus packages to protect the economy from the hit of the COVID-19 crisis, including cash payments to households and small business loans.
Local media have reported Suga wants to order his government to compile extra stimulus measures as early as November, a move that could help shore up fragile consumer sentiment that especially faces risks from a new wave of infections.
Gross domestic product was expected to expand an annualised 15.1 per cent in the third quarter after posting a record contraction in the preceding three months, the poll showed.
By destination, shipments to the United States - Japan's key market - rose 0.7 per cent in the year to September, a much slower pace than the 21.3 per cent drop seen in August, driven by stronger demand for passenger cars and electrical power machinery.
Exports to China, Japan's largest trading partner, rose 14 per cent year-on-year in September, marking the third straight monthly rise in China-bound shipments, the data showed.
Exports to the rest of Asia lost 2 per cent, their slowest pace of decline since February.
Overall imports shed 17.2 per cent in the year to September, versus the median estimate for a 21.4 per cent decline.
As a result, the trade balance came to a surplus of 675 billion yen (US$6.4 billion), versus the median estimate for a 989.8 billion yen surplus.