TOKYO: Japan’s exports rose at the fastest pace since 1980 in May and a key gauge of capital spending grew, helping the world’s third largest economy offset sluggish domestic demand as Covid-19 vaccinations boost business activity in key markets.
The jump in exports largely reflected a rebound in shipments from last year’s pandemic-driven plunge, but was a welcome sign as the economy struggles to rebound from the first quarter’s doldrums amid a prolonged coronavirus state of emergency.
The solid data will likely bolster the view that the central bank will stick with its ultra-easy policy at its June 17-18 policy meeting, although it may extend pandemic-relief programmes to back a fragile economic recovery.
“We cannot count on private consumption, but an uptrend in exports and capital spending will help pick up the slack in the second quarter,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Still, export growth may lack strength as a global chip shortage will put a drag on car production over the next half year or so,” he added.
Ministry of Finance data showed exports grew 49.6 per cent year-on-year in May, versus a 51.3-per cent increase expected by economists in a Reuters poll, led by US-bound car shipments. — Reuters
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