Japan’s exports and imports grew at a slower pace than expected in June, signaling a slowdown in economic activity both domestically and in key export markets. Exports rose by 5.4% year-on-year, falling short of expectations for a 6.4% increase and marking a deceleration from the 13.5% jump seen in May. Imports grew by a modest 3.2%, significantly lower than the anticipated 9.3% rise and a sharp decline from the 9.5% increase recorded in May.
The weaker yen played a role in bolstering export values, but overall sales volume remained sluggish due to weak demand in major export destinations like the US and China. Meanwhile, the weak yen further weighed on import costs, adding to already sluggish domestic spending trends. Sticky inflation, slow wage growth, and a sluggish economy have hampered Japanese consumer spending in recent months.
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Despite these challenges, Japan’s trade balance swung to a surplus of 224 billion yen ($1.44 billion) in June, defying expectations for a deficit of 240 billion yen and reversing sharply from the 1.22 trillion yen deficit in May.