Japan’s exports rose for a fifth straight month in April, helped by a boost in value from the weak yen, government data showed on Wednesday, but shipment volumes struggled as soft demand weighed on growth.
The trade data clouds policymakers’ hopes for exports to offset weak domestic consumption. Export volumes remain soft with Japan’s biggest trading partner China struggling to stage a convincing recovery and the U.S. economy losing momentum.
Ministry of Finance data out on Wednesday showed Japan’s exports rose 8.3% in April from a year earlier, undershooting an 11.1% gain expected by analysts in a Reuters poll.
In volume terms, however, Japanese shipments fell 3.2% year-on-year in April, down for the third straight month.
“The weak yen and global inflation appear to push up exports in value, but export volumes underline weakening global demand,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “Exports remain soft for the time being as pent-up demand for automobiles runs its course.”
The trade data comes as Japan seeks to drive sustainable growth underpinned by higher wages and durable inflation, which are seen as prerequisites for the central bank to shift away from near-zero interest rates.
The trade statistics come a week after data showed Japan’s economy contracted 2% in the first quarter, with exports of goods and services tanking 5%, leaving the economy without a growth engine.
Imports rose 8.3% in April, due to increases in crude oil, airplanes and computers, swinging the trade balance into a 462.5 billion yen ($2.96 billion) deficit.
Separately, Japanese business morale held steady in May, but manufacturers and service-sector firms complained that inflationary pressures driven by the weak yen were squeezing profit margins, a Reuters monthly survey showed on Wednesday.
Further clouding the outlook, manufacturers surveyed by the Cabinet Office forecast that core machinery orders, which serve as leading indicator of capital spending in the coming six to nine months, would fall 1.6% this quarter, government data showed.