TOKYO • Japan’s exports grew at the fastest pace since 1980 in May and a key indicator of capital spending increased, helping the world’s third-largest economy offset weak domestic demand as Covid-19 vaccinations stimulate business activity in key markets.
The rise in exports largely reflected a rebound in shipments from the plunge caused by last year’s pandemic, but was a welcome sign as the economy struggles to rebound from the first quarter slump in a state prolonged emergency.
The solid data is likely to bolster the view that the central bank will maintain its super-easy policy in its policy meeting today and tomorrow, although it may expand pandemic relief programs to support a fragile economic recovery.
The government recently extended emergency coronavirus restrictions in Tokyo and other major areas.
“We cannot count on private consumption, but an upward trend in exports and capital spending will help fill the void in the second quarter,” said chief economist of the Norinchukin Research Institute, Takeshi Minami. “Still, export growth may lack momentum as a global chip shortage weighs on auto production in the coming half of the year.”
Data from the Ministry of Finance yesterday showed that exports rose 49.6% year-on-year last month, compared to a 51.3% increase expected by economists in a Reuters poll, conducted by Car Shipments to destination of the United States.
The jump follows a 38 percent increase in April and marked the largest monthly increase since April 1980, when shipments jumped 51.4 percent.
The increase last month largely reflected the pullback effect of a 28.3% drop in May of last year.
By region, exports to China, Japan’s largest trading partner, increased 23.6%, driven by chip production equipment, hybrid cars and scrap copper, according to trade data.
Exports to the United States, another key market for Japanese products, jumped 87.9% last month, a record year-on-year growth according to like-for-like data dating back to January 1980, driven by cars and vehicles. car parts.
Imports rose 27.9% year-on-year last month from a median estimate of a 26.6% gain, leading to a trade deficit of 187.1 billion yen (S $ 2.26 billion), against the median estimate of a shortfall of 91.2 billion yen.
Separate data from the Cabinet Office showed orders for basic machinery, which is a leading indicator of capital spending over the next six to nine months, rose 0.6% in April from the previous month, in below an expected gain of 2.7%.
The Cabinet Office left its assessment on machine orders unchanged, saying a pickup was stalled.
A government official said strong foreign demand for chip-making equipment helped support foreign orders, which jumped 46.2% in April, rebounding from a 53.9% drop in March.
Base orders, which exclude those for ships and electric utilities, rose 6.5% year-on-year in April, compared to an 8% gain expected by economists, the data showed.