Japan’s imports rose for a seventh straight month in July, indicating the world’s third-largest economy is showing steady signs of strength in domestic demand; perhaps good news for the Bank of Japan and its hopes of beating deflation.
Total imports rose 16.3% in the month from a year earlier, roughly in line with a median forecast for a 17.0% gain, on brisk demand for personal computers and digital cameras from China.
It followed a 15.5 percent rise in June, showing strength in domestic consumption that served as a key driver of Japan’s economic growth in the second quarter.
Japan’s exports rose for an eighth straight month in July on robust shipments to the United States and a boost from a weak yen.
“Exports aren’t particularly strong in volume terms but will gradually recover ahead. The import figures, on the other hand, underscore the strength of domestic demand,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Japan’s economy expanded at the fastest pace in more than two years in the second quarter as consumer and company spending picked up, suggesting a long-awaited bounce in domestic demand.
Exports to the United States rose 11.5 percent in July from a year earlier to mark the sixth straight month of gains. That pushed up Japan’s trade surplus with the US by 9.1% from a year ago to 647 billion yen ($5.88 billion).
Japan’s trade surplus has been a target of criticism by US President Donald Trump’s administration, which has called for cutting the US trade deficit under his “America First” policies.
Total exports increased 13.4% in July from a year earlier, Ministry of Finance data showed on Thursday, roughly in line with a median market forecast for a 13.6% gain.
The rise, which followed a 9.7% increase in June, was driven by auto shipments to the United States and demand from China for electrical equipment, the data showed.
Shipments to Asia were up 14.8% in July from a year earlier, while those to China rose 17.6% to mark a ninth straight rising month.
But the gain in exports was more modest in volume terms at 2.6%, suggesting the value of exports was inflated by the yen’s declines during the month.