Japan's Exports to China and U.S. Drop Amid Weak Auto Demand

Japan's exports to China, its largest trading partner, decreased by 7.3 percent in September compared to the previous year, and exports to the United States also saw a 2.4 percent decline, as per the data. Lack of strong demand for auto manufacturers caused export decreases in both nations.

Data disclosed on Thursday (Oct 17) revealed that Japan experienced a decline in exports in September for the first time in 10 months, which is concerning for policymakers due to the potential complications it may cause for the central bank's transition away from ultra-easy monetary policy after years.

Exports were negatively impacted by weak demand in China and slowing US growth, with the yen's recent strengthening adding to the pressure on export values, partly driven by the Bank of Japan's surprising rate increase in late July.

"It's possible that exports will continue to struggle in coming months in light of uncertainties particularly in the Chinese economy," Kazuma Kishikawa, economist at Daiwa Institute of Research, said.

He stated that China's stimulus packages are not having the expected effect as domestic demand in the country seems to be weaker than anticipated.

Data from the Ministry of Finance indicated that exports in September fell by 1.7 per cent compared to the previous year, falling short of the market's expected 0.5 per cent increase and coming after a revised 5.5 per cent growth in August.