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TOKYO — Japan’s exports logged a third
straight month of double-digit gains in April led by US
demand, but surging global commodity costs inflated the
country’s import bill to a record, adding to worries about the
rising cost of living.
Shoring up the prospects of a private demand-led recovery,
however, was a gauge of capital expenditure that posted its
first monthly gain in three months.
The mixed data on Thursday followed the yen’s falls to
two-decade lows beyond 131 to the dollar earlier in May,
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which stoked fears of worsening terms of trade and added
financial burdens for the resource-poor Japanese economy as
import costs soar.
A weak yen, once considered a boon to the export-led
economy, is now having less of an impact as shipments grow
smaller, given the ongoing shift by Japanese manufacturers to
offshore production.
Japan’s exports rose 12.5% in April from a year earlier,
Ministry of Finance data showed, led by US-bound shipments of
cars and undershooting a 13.8% increase expected by economists
in a Reuters poll. It followed a 14.7% rise in March.
Imports rose 28.2% in the year to April, versus the median
estimate for a 35.0% increase, as a weaker yen helped boost
already surging global commodity prices.
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That resulted in a trade deficit of 839.2 billion yen
($6.54 billion), narrower than the median estimate for a 1.150
yen shortfall but posting a ninth straight month in the trillion yen
red.
Analysts have warned of the risks of prolonged cost-push
inflation to the fragile economy with external factors, not
domestic demand, pushing import bills higher.
Separate data showed on Thursday Japan’s core machinery
orders rose 7.1% in March from the previous month, versus a 3.7%
increase expected by economists in a Reuters poll.
The volatile data series, regarded as a leading gauge of
capital expenditure in the coming six to nine months, provided a
glimmer of hope for a domestic demand-led recovery.
Japan’s economy shrank for the first time in two quarters in
the January-March period as COVID-19 curbs hit the service
sector and surging commodity prices created new pressures.
($1 = 128.3600 yen)
(Reporting by Tetsushi Kajimoto and Daniel Leussink; Editing by
Sam Holmes)
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