Japan’s exports fall, imports from China slump as virus impact widens

(C) Reuters. Japan’s exports fall, imports from China slump as virus impact widens

By Daniel Leussink

TOKYO (Reuters) – Japan’s exports slipped for a 15th straight month in February as U.S. and China-bound shipments declined, suggesting a cooling of business activity in the world’s third-largest economy due to the coronavirus outbreak.

Imports from China fell at their fastest pace since 1986 after the virus, which has killed more than 7,000 people worldwide, led to a widespread shutdown of production in the region’s largest economy.

Ministry of Finance (MOF) data out on Wednesday showed Japan’s exports fell 1.0% from a year earlier in February, dragged by U.S.-bound shipments of cars and metal processing machinery to China.

It was the 15th straight month of contraction, marking the longest such run since a 23-month stretch to July 1987 when the height of the country’s stock market and real estate bubble was not yet reached, Refinitiv data showed.

The fall was also smaller than a 4.3% decline expected by economists, and followed a 2.6% decrease in January.

The data offers the strongest evidence yet of the growing economic impact coronavirus crisis. Many companies complained about the closing of factories in China and declining trade with Asia’s largest economy in a Reuters survey published on Wednesday.

That followed a survey the previous day that showed Japanese business confidence slumped to decade lows in march as the spreading coronavirus outbreak is dealing a heavy blow to Japan’s economy.

By region, Japan’s exports to China fell 0.4% year-on-year in February, dragged down by falling shipments of integrated circuit chip manufacturing parts and ground products for chemicals.

U.S.-bound exports, a key destination for Japanese cars and electronics, dropped 2.6% in February, posting a seventh straight month of declines due to falling exports of 3,000-cc cars and semiconductor production equipment.

Reflecting weak domestic demand, Japan’s total imports shed 14.0%, in line with the median estimate for a 14.4% decrease, dragged down by the sharp drop in imports from China.

Imports from China slumped 47.1% from the previous year, seeing their biggest drop since August 1986, ministry officials said, as the country went into lockdown due to the spreading coronavirus epidemic.

As a result, Japan’s trade balance recorded a surplus of 1.110 trillion yen ($10.34 billion), its largest since September 2007, versus the median estimate for a 917.2 billion yen surplus.