Japan's exports in the first half of 2020 fell 15.4 percent from a year earlier, posting the largest year-on-year drop in more than 10 years, as the new coronavirus pandemic weighed heavily on overseas demand for cars and other industrial goods, government data showed Monday.
But economists expect the drop in exports to slow in the second half, with the impact of the virus outbreak waning gradually as many countries reopen their economies and set up stimulus measures to revive weakened demand.
Exports in the January-June period fell to 32.36 trillion yen ($300 billion), logging the steepest dive on a half-yearly basis since a 22.8 percent plunge in the second half of 2009 in the wake of the global financial crisis, according to a preliminary report by the Finance Ministry.
The sharp drop reflects a 30.9 fall in car exports, the biggest decline since a 34.4 percent drop in the 2009 second half. Exports of auto parts declined 29.0 percent.
The world's third-largest economy logged a goods trade deficit of 2.24 trillion yen in the six-month period, the biggest since 5.19 trillion yen logged in the latter half of 2014. It marked the fourth consecutive half-year period of red ink.
Imports fell 11.6 percent from the previous year to 34.60 trillion yen, the sharpest drop since a 14.4 percent slide in the second half of 2016, reflecting a drop in domestic demand under a nationwide state of emergency to stem the virus spread for about a month from the middle of April.
Both exports and imports were down for the third straight six-month term.
"We'll keep monitoring the situation closely," a ministry official said at a briefing, referring to the impact of the virus outbreak.
By country, the goods trade surplus with the United States plummeted 49.3 percent to 1.75 trillion yen in the first half, with exports falling 27.2 percent on slumping auto demand, larger than the 9.7 percent decline in imports.
The surplus marked the sharpest fall since a 67.0 percent dive in the first half of 2009 and was the smallest amount for a half year since the first half of 2011, when a massive earthquake and tsunami devastated northeastern Japan in March that year.
As for China, where the virus epidemic was first detected late last year, exports slipped 3.6 percent from a year earlier to 6.78 trillion yen, weighed down by declines in shipments of items such as chemical product materials and auto parts.
Imports decreased 6.7 percent to 8.48 trillion yen, led by falls in clothing and cellphones, leaving Japan with a deficit of 1.70 trillion yen.
Across Asia, including China, Japan's surplus plunged 20.5 percent to 1.37 trillion yen, with exports down 8.5 percent and imports falling 7.3 percent. With the European Union, Japan saw a trade deficit of 729.96 billion yen, as exports fell 17.7 percent and imports dropped 11.3 percent.
In June alone, Japan recorded a trade deficit of 268.82 billion yen, with exports shrinking 26.2 percent from a year earlier to 4.86 trillion yen and imports declining 14.4 percent to 5.13 trillion yen.
Takeshi Okuwaki, an economist at the Dai-ichi Life Research Institute, said that Japan's slumping exports and imports "seem to have bottomed out" on a half-yearly basis, as June's data showed signs of economic activity picking up following the gradual removal of economic restrictions across the world including city lockdowns.
But Okuwaki said it will be hard to "achieve a V-shaped recovery" for trade figures.
"Risk factors such as economic activities in the U.S. halting again due to the further spread of the virus, as well as worsened employment and income environments across the world, could have a negative effect," he said.
All figures were compiled on a customs-cleared basis.