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August 26, 2009    

Japanese exports down 36.5% on year

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by Kay Murchie

Exports in the world’s second largest economy fell last month raising concerns that global stimulus packages are starting to decline.

Many overseas stimulus measures have already expired, causing economists to warn that as such fiscal support runs its course, exports could slow.

According to the Ministry of Finance, Japanese exports fell 36.5% in July on an annual basis and followed the 35.7% fall posted in June.

On a seasonally adjusted basis, exports fell 1.3% in July compared with the previous month.

The reason for the continued decline was slower shipments of cars to the Middle East and Russia and the US.

“Falls in exports have been moderating in recent months on companies’ restocking efforts and government stimulus worldwide, but the July data indicate that the recovery momentum is losing steam,” said Seiji Shiraishi, chief economist at HSBC Securities.

“It is questionable whether exports will continue to recover once the stimulus effect runs out,“ added Shiraishi.

Across the world, US exports also fell in July by 39.5% compared with July 2008, while exports to the fast-growing Chinese economy fell 26.5% and a 45.8% fall was reported in the European Union.

It was recently reported that Japan has emerged from its longest recession since World War II after the economy grew by 0.9% in the second quarter, following four consecutive quarters of contraction.

Earlier this month, Japan’s central bank again kept its key interest rate at 0.1% and adopted a cautious outlook for the economy.

The bank said conditions had stopped deteriorating but warned that unemployment is expected to rise and consumer spending will remain weak.

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