"There were no big surprises here. Keeping in mind export volumes in June did well so there was an anticipated pullback to these numbers".
- Kathy Matsui, Goldman Sachs Japan
According to the latest data revealed, Japan's exports for the previous month experienced their sharpest monthly drop in nearly seven years, since a surging yen deteriorates the country's trade picture, highly affecting shipments of cars, ships and steel. Japanese trade surplus equals $5.1 billion in July, while exports sank 14% from a year earlier. Moreover, the harsh decline in exports by the world's third-largest economy was outperformed by a nearly 25% decrease in imports, admitting persisting weakness in domestic demand. Two of these releases were the sharpest monthly year-on-year drops in almost 7 years. The recent increase in the value of the Japanese yen, to about 99 yen per US dollar, pushed down costs for oil and gas imports. For example, Japan's imports of fuels, the biggest category of imports for the nation, lost 42% in July from the year before. Also, weak Thursday's export data are the latest reminder that Tokyo's policymakers failed for preserving growth in the world's number three economy.
In the meantime, Japan's economy stalled in the April-June quarter, separate GDP figures showed this week, confounding Tokyo's massive monetary easing campaign. The world's one of the largest economy posted zero growth on-quarter, falling below economists' expectations for a modest 0.2% expansion.
© Dukascopy Bank SA