Japan’s exports are expected to soar in June, while consumer inflation is moderate: Reuters survey By Reuters

© Reuters. File photo: On May 22, 2019, a man on a bicycle drives past a container in an industrial port in Tokyo, Japan. REUTERS/Kim Kyung-Hoon

Author: Tetsu Kajimoto

TOKYO (Reuters)-A Reuters survey on Friday showed that Japan’s exports in June may be due to strong global demand for machinery and technology-related goods and a sharp rebound in shipments from the decline caused by the pandemic last year. Soaring.

Exports in June increased by 46.2% year-on-year, achieving double-digit growth for the fourth consecutive month. The annual export growth rate was largely affected by the June 2020 COVID-driven plunge. Even with global chip shortages, export growth has remained strong and has suppressed Japan’s car production and shipments.

As Tokyo re-enters the emergency containment of the coronavirus and consumer spending is weak, policymakers are counting on external demand to make up for the weakness of the world’s third largest economy.

The Japanese economy shrank at an annual rate of 3.9% from January to March, and there may be little growth in the second quarter because of the pandemic’s impact on service spending.

A Reuters survey showed that core consumer inflation may pick up slightly in June, highlighting the challenge the Bank of Japan (BOJ) faces as it strives to achieve its elusive 2% inflation target.

After the Bank of Japan insists on large-scale monetary stimulus measures on Friday, investors will pay close attention to the trade data released at 2350 GMT on July 20 and the consumer price index released at 2330 GMT on July 19.

The export growth in June came after a 49.6% increase in exports in May, which was the largest monthly increase since April 1980. In June 2020, it was down 26.2%.

The survey showed that last month imports may have increased by 29.0% year-on-year, which would result in a trade surplus of 460 billion yen (US$4.18 billion).

According to a Reuters survey, the core consumer price index (CPI), which includes petroleum products but excluding fluctuating fresh food prices, is expected to rise by 0.2% in June from the same period of the previous year, after rising by 0.1% in May.

The Bank of Japan maintained its large-scale monetary stimulus policy in the policy review concluded on Friday, maintaining the policy rate at minus 0.1%, and maintaining the 10-year Japanese government bond yield target at around 0%.

(1 USD = 109.9900 yen)

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