(Bloomberg) — Gains in Japan’s exports widened in November for the first time since May in a sign global trade was regaining traction before the omicron variant of the coronavirus began to spread.
The value of Japan’s overseas shipments rose 20.5% from a year earlier, up from an increase of 9.4% in October, the finance ministry reported Thursday. Economists had expected a gain of 21%. On a seasonally adjusted basis, exports advanced 5.3% from the previous month.
Improved Japanese trade adds to signs the global economy was on a solid footing even as supply chain snarls persisted. At home, higher vaccination rates and falling infection cases have allowed the government to lift virus emergency measures, helping restaurants and other services get back on track.
Less Than One Covid Death a Day in Japan as New Cases Plummet
But the spread of the omicron variant in late November now clouds the outlook to some extent, as countries limit access to travelers and weigh whether to reinstate domestic restrictions. Supply constrains also continue to affect manufacturers, with Toyota Motor Corp. cutting production again this month due to part shortages.
Japan may need the help of strong exports to return to growth following last quarter’s contraction, as rising prices for gasoline and other select items become an issue for consumers.
What Bloomberg Economics Says…
“Looking ahead, we expect exports to increase in December on strong demand from the U.S. Uncertainty due to the omicron variant is a downside risk.”
–Yuki Masujima, economist
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More details:
- Imports increased 44% from a year ago, partly because of rising oil prices and a weaker currency
- Exports to the U.S. rose 10%, those to Europe and China increased 16%
- The trade balance was a 955 billion yen ($8.4 billion) deficit
A global shortage of semiconductors during the pandemic has prompted Japan to renew its efforts to revitalize domestic chip making and help fund the construction of a new factory in western Japan by Taiwan Semiconductor Manufacturing Co.
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