Japanese Exports Another Casualty of Chinese Slowdown

Japan’s exports slowed for a second straight month in August in an increasingly worrying sign that China’s economic slowdown is hurting the world’s third-biggest economy while shipments in Singapore slumped, increasing the chance that policymakers will inject fresh stimulus before too long.
The 3.1 percent annual increase in exports in August was smaller than the median estimate for 4.0 percent growth expected by economists in a Reuters poll, and less than July’s 7.6 percent year-on-year rise.

In Singapore, exports on the month fell 4.6 percent in August on a seasonally adjusted basis, compared to a 0.5 percent rise predicted in the survey and a 2.5 percent gain in July, trade agency International Enterprise Singapore said in a statement.

Slowing exports could increase the chance of additional monetary easing from the Bank of Japan, because this could lead to lower factory output, less economic activity and less momentum needed to offset deflationary pressure caused by a collapse in oil prices.

“Our house view is that the BOJ will ease again in January, but the economic data suggest an increasing chance the BOJ will move at the end of October,” said Hidenobu Tokuda senior economist at Mizuho Research Institute.

“I wouldn’t be surprised if exports started falling. This is worse than the BOJ anticipated.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza