Japan’s export growth slowed to a crawl in November as shipments to the United States and China weakened sharply, in a sign slowing external demand and a Sino-U.S. trade dispute may leave the world’s third-largest economy underpowered over the next year.
The 0.1 percent year-on-year rise in exports undershot a 1.8 percent annual increase expected by economists in a Reuters poll, and was well below a 8.2 percent jump in October. In volume terms, exports fell 1.9 percent in the year to November.
The trade data highlights rising external risks for Japan’s export-led economy, and comes as the Bank of Japan reviews policy at a two-day meeting that ends Thursday. With consumer inflation remaining weak, and as global economic momentum cools, the BOJ is widely expected to maintain its current ultra-easy policy.
Analysts expect exports to be a drag on the economy over the coming quarters as external demand ebbs. Policy makers will also have to consider the risks from the China-U.S. trade war which have yet to play out in Japan’s shipment figures.
“Japan’s export volume is slow to expand against the backdrop of global economic slowdown,” said Toru Suehiro, senior market economist at Mizuho Securities. “Uncertainty over the world economy remains strong. As such, Japan’s exports will struggle to pick up for the time being.”