Japan July exports data was weak once again
Exports remain down by 1.6% y/y and that continues to highlight weakness seen in Japanese shipments amid the ongoing slowdown in the global economy.
Markets have become very much accustomed to the weakness in this space as annual Japanese exports have been on the decline since December 2018. However, I reckon this isn’t a spot to take lightly as it will feed into Japanese/global economic sentiment.
Of note, Japan’s exports to South Korea fell by 6.9% from a year earlier while exports to China fell by 9.3% from a year earlier. In particular, the latter suggests that Chinese demand isn’t as robust as what it used to be – something for the global economy to take note of.
Much like most countries around the world now, it is but a question of how long can domestic demand i.e. personal consumption and capital investment carry the weight of the economy on their shoulders. At this point, spillover effects appear inevitable down the road.
Once that happens, expect the global slowdown to take a experience a more profound downturn and that will only feed into the negative risk backdrop in the long-term.