Japan reported Thursday that its exports increased by 1.6% in October from a year earlier, as auto and ship shipments rose.
Government data showed exports to the rest of Asia fell, while exports to the U.S. and Europe surged.
Japanese imports fell 12.5% to 9.8 trillion yen ($64 billion), mainly due to lower costs for oil, gas and coal. Shipments of computer parts and cereal also were lower, while steel imports surged.
With exports at 9.15 trillion yen ($60.5 billion) The trade deficit for October shrank by 70% a year earlier to 662.5 billion yen ($4.4 billion).
October marked the second straight month of export growth, but the climb slowed from 4.3% in September. That could be bad news for the world’s third largest economy, which heavily depends on export manufacturing to drive growth.
“Exports helped drive stronger growth in the first half of this year, but now that the export recovery has run its course, the prospects for a fresh boost to growth appear remote,” Stefan Angrick, economist at Moody’s Analytics, said in a report.
Japan’s economy contracted at a 2.1% annual pace in July-September as consumption and investment weakened.
Although Japan’s trade deficit has narrowed in the past year, rising prices for some commodities mean the decline will slow in the months ahead, he said.
Japan recorded a trade deficit, which is not seasonally adjusted, of 662 billion yen ($4.4 billion), down 70% from the 2.2 trillion yen deficit in October 2022.
Separately, core machinery data for September showed a 1.4% increase, beating expectations, according to Cabinet Office data Thursday.
One bit of recent positive news has been the return of tourists, which are counted as exports, after travel and other social restrictions related to the coronavirus pandemic lifted.
Incoming tourists in October, at more than 2.5 million people, surpassed a record hit four years ago, before COVID-19 struck, the Japan National Tourism Organization reported this week.
