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Japan's exports suffering from lack of US consumer demand

THE slump in Japan's exports showed little sign of relenting in May, with auto exports to the United States down more than half, adding to doubts about a quick recovery from the global recession.

Exports from the world's second-largest economy plunged 40.9 percent from a year earlier, accelerating from a 39.1 percent fall in April, the government said yesterday, as consumers overseas bought fewer of the country's cars, electronics and other mainstay exports.

Japan's monthly trade surplus reached 299.8 billion yen (US$3.1 billion), the biggest in a year, but due to a sharp fall in imports that further underscores weakness in the economy.

"Overall exports remained depressed, which squarely reflected the ongoing economic downturn," said Yu Ooki, a finance ministry official.

Japan's economy shrank at a 14.2 percent annual pace in the first quarter - better than first thought, but still its worst quarterly contraction yet as trade wilted amid the worst global recession in decades.

Economy Minister Kaoru Yosano said last week that the slump had hit bottom but warned a recovery would depend on the state of the world economy.

Exports to the US fell 45.4 percent in May, marking the 21st straight monthly decline, the finance ministry said. US-bound auto exports nosedived 54.8 percent - grim news for major Japanese auto makers such as Toyota Motor Corp and the parts suppliers that depend heavily on the American market. Japanese shipments of auto parts to the US were down 47.8 percent.

Hiroshi Watanabe, an economist at Daiwa Institute of Research, said the decline in Japanese exports could deepen later in the year due to lingering uncertainty over a recovery in the US economy.

"Japan's exports heavily depend on US consumer demand. But we have yet to see signs showing a solid recovery of the US economy," Watanabe said.

"In the face of stagnant wages and worries over job losses, it is unlikely that American consumers will snap up Japanese cars and electronics goods," he said.

Japan's exports to the European Union decreased 45.4 percent in May, the ministry said. Asia-bound shipments fell 35.5 percent while exports to China alone declined 29.7 percent - the eighth consecutive monthly fall.

Overall exports in May stood at 4.02 trillion yen. Imports fell by 42.4 percent to 3.7 trillion yen.


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