Japan’s exports climb amid low Chinese demand

There has been a rise in Japan's exports in May for a ninth straight month following solid demand from the United States despite weak China demand is a worry for an economy that has just started to recover after a slump last year.



Recent positive data led to expectations that Japanese companies would begin to invest in capacity, eliminating one of the biggest drags in the world's third-largest economy.



In fact, according to analysts, exports growth and domestic demand would be important to this end, emphasizing that weakness in China puts forward a challenge.



Yuichiro Nagai who is an economist at Barclays Securities Japan stated that export to Asian nations had been very weak recently, especially to China which is a concern for the economy.



Though a weak yen helps exports, its contribution is not as immense and the main issue is weak demand from Asia while strong demand from the United Stated and Europe underpins exports.



The Reuters poll of 23 economists showed that exports were up 3.5 percent in May as compared to a year ago, following a 8.0 percent rise in April and a 8.5 percent increase in March.



On the other hand, imports have fallen an annual 7.5 percent leading to a trade deficit of 226.0 billion yen in May.



In the first quarter, the economy expanded much faster than initially expected when firms boosted business investment, supporting the central bank's view that a recovery from last year's recession is gaining momentum.



Priscilla Camryn By: Priscilla Camryn
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