Japan's export picture worsens as buyers pull back again

Japan's exports weakened in May, including shipments to its Asian trading partners, raising doubts about the region's ability to pull the rest of the world out of its slump.

From Bloomberg News:

Shipments abroad dropped 40.9% from a year earlier, more than April’s 39.1% decline, the Finance Ministry said Wednesday. The median estimate of economists surveyed was for a 39.3% decrease.

From a month earlier, exports fell 0.3%, the first deterioration since February.

Declines in shipments to Asia accelerated for the first time since January, damping hopes that demand from the region will spur a recovery in the world’s second-largest economy.

“Final demand just isn’t picking up and it’s still hard to expect a very strong economic recovery,” said Azusa Kato, an economist at BNP Paribas in Tokyo.

Shipments to China, Japan’s No. 1 trading partner, were down 29.7% in May from a year earlier, compared with a 25.8% year-over-year drop in April, according to the Finance Ministry's report. Exports to Asia overall were off 35.5%, versus a 33.4% decline in April.

Indian demand for Japanese goods was particularly weak, falling 50% in May compared with a 31.2% drop the previous month.

Japanese exports to the U.S. fell 45.4% from a year earlier, but that was a slight improvement compared with the 46.3% drop in April. Japan's imports of U.S. goods, however, shrank substantially. They were down 40.3% in May compared with a 29.3% decline in April.

Among other trading partners, demand for Japanese exports in Russia has virtually collapsed in recent months; shipments to Russia plummeted 88.3% in May from a year earlier.

-- Tom Petruno