Japanese exports fall on sluggish Chinese demand

Japanese exports fell by more than analysts expected as Chinese consumers failed to offset falling demand in Europe, Reuters reported. Japan’s exports dropped 8.1% year-on-year in July, the largest fall in six months. Exports to Europe fell by 25.1%, the largest decline since October 2009, while exports to China, Japan’s biggest trading partner, fell 11.9% year-on-year. Overall Japan’s trade deficit clocked in at a larger-than-expected US$6.5 billion. “We hoped domestic demand in China would support Japan’s economy, but the story is different,” said Masayuki Kichikawa, chief Japan economist at Bank of America-Merrill Lynch. Other analysts noted that trade figures had slumped across East Asia; Chinese exports were up just 1% in July. “It’s hard to be optimistic given what’s happening in key trading partners,” said Robert Prior-Wandesforde, director of Asian economics at Credit Suisse.