Japan exports take another hit from China slowdown

Japan’s exports slowed for a second straight month in August in a worrying sign that China’s economic slowdown could deal a damaging blow to the world’s third-biggest economy and force policymakers to inject fresh stimulus before too long.

The data joins a string of depressing shipment numbers in key regional economies, including South Korea and Taiwan, which has heightened anxiety over a China-led slowdown in global growth.

Slowing exports could increase the chance of additional monetary easing from the Bank of Japan.

“Our house view is that the BOJ will ease again in January, but the economic data suggest an increasing chance the BOJ will move at the end of October,” said Hidenobu Tokuda senior economist at Mizuho Research Institute.

The finance ministry said Japanese exports in August rose 3.1%, less than the median estimate for 4% growth by economists in a Reuters poll, and less than July’s 7.6% annual rise.

Exports destined for China, Japan’s largest trading partner, fell 4.6% in August from a year ago, compared with July’s 4.2% annual increase.

The decline was the first since February due to falling shipments of car parts and electronics. “This is worse than the BoJ anticipated,” Mr Tokuda said.