Japan’s exports continued their gains with double-digit growth in August, supported by massive shipments of computer chip-making equipment, but the pace of growth began to decline after the Covid-19 virus hit major supply chains in Asia and reduced production from factories there.
Analysts do not see that the growth of trade will overshadow the concerns of the aspirations of the Japanese economy, which has not yet recovered to pre-epidemic levels after being hit hard by the collapse in global trade during the first quarter of 2020.
Exports grew by 26.2% in August compared to the same month last year, according to the country’s Ministry of Finance. marking the sixth consecutive month of double-digit growth as strong demand for computer chip-making equipment offset sluggish auto shipments to the US and EU, but the growth was significantly lower than the 34% expected by economic analysts and the 37% they had predicted for the previous month.
Toyota Motor Corporation lowered its annual production target by about 300,000 vehicles last week after mounting COVID-19 infections slashed production at auto parts plants in Vietnam and Malaysia. Read more [Toyota Motor Suffers From Cutting And Chip Crises].
Despite the improvement in vaccination rates and the peak of virus infections, analysts believe that Japan’s economy will expand by 1.2% during the current quarter on an annual basis, but this is much less than what they expected the previous month.
Imports jumped by 44.7% in August compared to the same month last year, compared to the average estimate of analysts, which was a growth of only 40%, mainly due to the strong demand for fuel and medical goods, which was reflected in a trade deficit of 635.4 billion yen ($5.81 billion), the highest deficit the country has seen since December 2012 and well above the average forecast of just 47.7 billion yen.