Japan's exports snapped seven months of double-digit growth in October due to slowing car shipments, as global supply constraints hit the country's major manufacturers.
The slowing growth shows Japan's vulnerability to supply chain bottlenecks that have been particularly disruptive for the car industry and have clouded the outlook for trade.
"While carmakers are planning 'revenge production' in November and December, clouds still loom - semiconductor shortages will last until year-end at least, and no one knows if carmakers' plans to avert the impact of chip shortages by adjusting their supply chains would succeed," said Ryosuke Katagi, market economist at Mizuho Securities.By region, exports to China, Japan's largest trading partner, increased 9.5% in the 12 months to October, slowing from 10.
Imports rose 26.7% in the year to October, below forecasts for a 31.9% increase, bringing the trade balance to a deficit of 67.4 billion yen , compared with the median estimate for a 310.0 billion yen deficit. The weaker-than-expected core orders signal corporate Japan's reluctance to commit to firmer capital spending as supply bottlenecks pose a risk to the outlook.
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