Japan’s export growth slowed sharply in December as shipments to China fell for the first time in seven months, raising fears of a further slowdown in the global economy and external demand for Japanese shipments.
(Total) exports rose 11.5% year-on-year in December after a 20% gain in November, marking the slowest growth since the beginning of 2022, pulled down by slumping sales of cars, auto parts and China taken. chip-making machinery, data from the Ministry of Finance (MoF) showed on Thursday.
Weak data dashed policymakers’ hopes for an export-led recovery from the coronavirus pandemic, putting more pressure on the government to accelerate wage increases to Japanese firms to help boost domestic demand.
Exports to China, the biggest trading partner, fell 6.2% year-on-year in value and were down 24% in volume terms in December.
Exports to the United States rose 16.9% from a year earlier in December, led by cars, mining equipment and aero-engine parts.
“The unexpected halt of the Chinese economy came on top of recessions in Europe and the US. In a worst-case scenario, it could jolt Japanese exports, which in turn could hit Japan’s factory output and capital spending,” Atsushi Takeda, said the chief economist of ITOCHU Research Institute.
“Japan will have no choice but to turn to domestic demand to lift the slack. In that sense, spring wage talks between labor and management hold the key to seeing whether private consumption will drive virtuous economic growth.” “
Economic activity in China has been disrupted by a wave of COVID-19 infections since the government ended its stringent “zero-Covid” controls in December.
Although China’s latest wave is expected to fade by spring, the world’s second-largest economy will take time to return to pre-pandemic levels and the risk of further COVID waves remains, Mr Takeda said.