Japan July exports face sharpest decline since financial crisis, surging yen leads the fall

Japan’s exports during the month of July declined at the fastest pace since the financial crisis of 2008-09, as resurgence in the domestic currency made overseas shipments costlier. Also, sluggish demand from foreign counterparts dragged exports down for the 10th consecutive month.

Japan exports slid 14.0 percent in July, compared to a year earlier period to JPY5.728 trillion (USD57 billion), down for the 10th consecutive month, data released by the Ministry of Finance showed Thursday.

In addition, Exports in July fell due to lower shipments of cars to the United States, ships to Central America and steel to Italy, the data showed. Exports to China, Japan's largest trading partner, fell an annual 12.7 percent in July, extending the 10.0 percent decline seen in June.

Moreover, US-bound shipments fell 11.8 percent year-on-year, versus a 6.5 percent annual decline in the previous month. The volume of Japan's oil and kerosene imports fell 8.5 percent in July, recording the first decline in three months.

Overall imports plunged 24.7 percent to JPY5.215 trillion, marking the 19th straight month of contraction. Japan's trade balance for July came in at a surplus of JPY513.5 billion.

Meanwhile, sentiment towards the Japanese economy has little recovered despite continued efforts by the government to inject stimulus in to the system. However, any quick recovery is unlikely because of a big hit to earnings from the yen's sharp rise since the start of the year.