Japanese exports and imports surged in August, with both beating expectations as a recovery in trade appeared to gain momentum.
Japan has enjoyed a run of strong growth in exports this year, while rising imports add to signs that domestic demand is firming as well. The Japanese economy grew at an annualized 2.5 percent in the second quarter, more than double its potential growth rate. But while a weaker yen has improved trade data, inflation remains well below the Bank of Japan’s 2 percent target.
- “In a word, the trade data is strong,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute. “Imports are strong, but exports were stronger, and this is definitely a positive reading.”
- “The actual content of the data is better than the headline balance number,” Shinke said. “Autos and semiconductors are leading the export growth.”
- “In the third quarter, we will see a trend reversal in the Japanese economy,” said Hiroaki Muto, chief economist at Tokai Tokyo Research Center. “External demand will be strong and consumption will lack momentum.”
- Japan’s adjusted trade balance showed a surplus 367.3 billion yen (forecast +404.5 billion yen), marking 22 months of…