Econintersect: Japan saw an increase in exports (year-over-year) of 9.8% in February, up from 9.5% in January. While this may sound good, expectations had been for an increase of 12.4% in a poll of economists by Reuters. The decline of the yen since early April 2013 has been 8.4% so, in dollar terms, exports have risen less than 2%. The impact of disappointing exports was softened by a small year-over-year growth in imports (2.6%) and a dramatic decline of 18% from a record high in January. However, the balance of trade remained negative for the 20th consecutive month.
Japan must feel like a swimmer caught in a riptide less than one month before the country’s domestic consumption tax is set to jump by 60%, from 5% to 8%. It is called a consumption tax but it actually is a value added tax which will add to the cost at every stage of production, starting with raw materials.
Sources:
- Tepid exports cloud Japan outlook, more BOJ stimulus seen after sales tax rise (Tokyo/OTSU, 19 March 2014)
- Japan Exports (Trading Economics, 20 March 2014)
- Japan Imports (Trading Economics, 20 March 2014)
- Japan Balance of Trade (Trading Economics, 20 March 2014)
- Japan: Conflicted Policy (GEI News, 05 July 2013)
