Japan’s exports fell 8% in August from a year earlier, as trade tensions took a growing toll on demand across the region.
Exports of machinery, vehicles and chemicals all declined, the Finance Ministry reported Wednesday.
Exports totaled 6.1 trillion yen ($56 billion), while imports slipped 12%, the fastest rate in almost three years, to 6.3 trillion yen ($58 billion), suggesting slack demand inside Japan.
Shipments to the U.S. slipped 4.4% in dollar terms, to 1.2 trillion yen ($11 billion), while imports from U.S. dropped 9% to 718.4 billion yen ($6.6 billion). The surplus with the U.S. rose nearly 4%, the report said.
Trade with China took a bigger hit, with exports sinking 12% and imports down more than 8%. Exports to most other Asian countries also fell.
The yen’s growing strength against other currencies was a factor. But overall export volumes fell nearly 6% and import volumes also fell by 6% as trade tensions between the U.S. and China and between Japan and South Korea reverberated across supply chains.
Trade could rebound in coming months, Marcel Thieliant of Capital Economics said in a commentary.
“The big picture, though, is that exports are likely to remain weak over the coming year,” he said.
A government survey of businesses released Wednesday showed sentiment at its worst since the aftermath of the March 2011 earthquake and tsunami which devastated a swathe of Japan’s northeastern coast.
Looming over the outlook is a sales tax hike due to take effect in October that is likely to hit big purchases hardest, Capital Economics said.
This story has been corrected to show that exports fell 8% year-on-year in August.