Apr 19, 2016 11:09 PM

Japan exports, imports fall as economic doldrums persist

The Associated Press

TOKYO (AP) Japan's exports fell for a sixth straight month in March, sapped by weak shipments of machinery and chemicals, though a sharper decline in imports helped push the trade surplus to its highest level in more than five years.

Customs data reported Wednesday showed exports fell 6.8 percent from a year earlier to 6.46 trillion yen ($59.2 billion) while imports sank 14.9 percent to 5.7 trillion yen ($52.2 billion).

"The resulting balance of 754 billion yen ($6.9 billion) was the highest since October 2010.

Imports of coal, oil, food and machinery dropped. The change was exaggerated by a recent 10 percent surge in the yen's value against the U.S. dollar, to about 109 yen. That makes import costs lower in yen terms.

Japan also is importing more, lower cost food items from China, while reducing imports of U.S.-produced soybeans, meats and grains.

Vehicle shipments to the U.S., which account for 40 percent of its exports to the U.S., rose 6.4 percent.

In value terms, worldwide exports of machinery, electrical machinery and chemicals fell at double-digit paces.

Slack global demand and the slowdown in China, Japan's second-biggest export market after the U.S., have dragged on exports, slowing the recovery. Japan's exports to China dropped 7 percent in March, mainly due to drops in shipments of electrical machinery and chemicals.

The slower growth in China has also hit other Asian markets, hurting Japan's exports to other countries in the region.

Recent improvements in the global outlook will likely lift exports in coming months, economists say.

But the strengthening of the yen reduces profits earned in dollar terms when they are repatriated. That is a discouraging trend for companies that in recent years have benefited from a weakening of the yen against the dollar.

"For now though, the slump in export values is lowering firms' revenues and may undermine their willingness to expand capacity and lift wages," Marcel Thieliant of Capital Economics said in a commentary.

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