Japan's exports to decline again in March
Source: The Dollar Business Bureau
The rising yen dents Japan's export performance, which is likely to fall again in March, said Moody’s in its weekly outlook.
“Japanese exports are likely to fall again in March, illustrating the ill effects of the rising yen. The yen's prolonged appreciation will cause Japan to lose its export competitiveness, and overall profits to corporate Japan are set to fall,” said the credit rating agency, Moody’s.
In February 2016, Japanese exports fell consecutively for four months, underlining the continuous weakness in the economy that declined in the last months of 2015.
The exports fell 4% to 5703.4 billion yen in the month of February from 5940.8 billion yen than the previous year, greater than the market expectations of a decline of 3.1%. The major reason for most of the fall is the sales of manufactured goods, which fell 12.7% year-on-year, followed by a 4.8% decline in electrical machinery, mineral fuels fell 29.3% and machinery saw a drop of 2.4%.
In 2015, exports from Japan were worth $625.1 billion, a drop of 9.5% from the previous year. The country’s main 10 exports accounted for just 77.5% of the combined value of its overseas shipments.
The declining exports have created negative sentiments in Japan, where increase in wages have stagnated, consumer prices are hardly increasing, households are unwilling to spend and the stocks have jumped. Japanese currency has increased more than 5% against the US dollar, amid fears over slowdown in China and growth in the US. This adds to concerns about the fluctuating nature of Japanese economy between modest growth and shrinkage.
Japan is not the only Asian country suffering from export weakness. Trade data in India shows exports will decline, as weaker global growth has crimped demand for Indian products, stated Moody’s.