Japan exports witness 13th straight month of fall in October on stronger yen, sluggish global demand

Exports in Japan witnessed a 13th straight month of fall during the period of October, following strength in the local currency, amid a sluggish global demand. However, the current weakness in the yen may alter the trade outlook of the economy.

Japan’s exports fell 10.3 percent in the year to October, pulled down by a strong rise in the value of the yen and lower export volumes, much weaker than the expected 8.6 percent drop and September's 6.9 percent decline, data released by the Ministry of Finance (MoF) showed Monday.

Further, the country’s outbound shipments also fell 1.4 percent in volume terms in the year to October, falling for the first time in three months and following a 4.7 percent gain in the previous month. Japan posted a trade surplus for the second successive month, at JPY5.374 billion, data showed.

Further, shipments to China fell 9.2 percent in October from a year earlier, for the eighth straight month, as shipments of communication devices fell, while those to the rest of Asia, fell 9.9 percent, marking the 14th month of decline. U.S.-bound exports decreased 11.2 percent, posting an eighth falling month.

In addition, the country’s imports also declined, falling 6.5 percent versus the median estimate of a 16.3 percent fall. The trade balance came to a surplus of JPY496.2 billion (USD4.47 billion), versus the median estimate for a JPY615.4 billion surplus.

"We expect growth among Japan's main trading partners to pick up marginally and have penciled in a 1.5 percent rebound in export volumes next year," Reuters reported, citing Marcel Thieliant, Senior Japan Economist, Capital Economics.

Meanwhile, USD/JPY surged to near 6-month high today at 111.12, while at 5:18GMT, the FxWirePro's Hourly JPY Strength Index remained highly bearish at -150.21 (lower than the -100 benchmark for bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex