Reply #15: Japan Export Growth Slows; Shipments to U.S. Fall [View All]

[Ghost Dog]

(Update4)
http://www.bloomberg.com/apps/news?pid=20601080&sid=aWozrA3pm_2U&refer=asia
By Lily Nonomiya

May 24 (Bloomberg) -- Japan's exports to the U.S. fell for the first time in two years as the world's largest economy slowed. Shipments to Asia and Europe grew.

Exports rose 8.3 percent in April from a year earlier, cooling from 10.3 percent in March, the Ministry of Finance said today in Tokyo. Shipments to the U.S. dropped 4.8 percent, the steepest decline since May 2004.

The slump reflects the slowest growth in four years in the U.S., the destination of a fifth of Japanese exports, led by cars. Shipments to all other regions rose, with those to Asia climbing at the fastest pace in three months, driven by China.

``Japan's trade is being supported by demand from Europe and China,'' said Noriaki Haseyama, an economist at Dai-Ichi Life Research in Tokyo. ``U.S. consumer spending is weakening, especially in car sales, and we need to monitor how much impact that will have on the global economy.''

The yen traded at 121.49 per U.S. dollar at 3:37 p.m. in Tokyo from 121.60 before the report. The yield on Japan's 10- year bond rose 1.5 basis points to 1.695 percent.

Auto shipments fell 7.5 percent, the biggest decline since April 2004 when they slid 15.1 percent. Autos represent about 10 percent of Japan's overall shipments to the U.S.

Toyota Motor Corp., the world's largest carmaker by market value, expects sales growth in North America, its largest market, to slow to 1.6 percent this fiscal year from 15 percent. The company is building factories in Canada, Russia and China to make up for weak demand in the U.S.

U.S. Slowdown

Honda Motor Co., Japan's second-largest automaker, is increasing market share in China to help offset weaker demand in the U.S. Honda said last week its sales in China increased 27 percent in April.

``The U.S. slowdown is already affecting exports and that's making companies more cautious,'' said Takeshi Minami, an economist at Norinchukin Research Institute in Tokyo. ``Should U.S. demand stall further and affect other parts of Asia, that will hurt export demand.''

Concern about declining demand in the U.S. has already made itself felt in Japan. Machinery orders fell 4.5 percent in March and companies said they expect orders to plunge 11.8 percent this quarter.

``Japanese companies are expected to remain hesitant about expanding investment until they see more solid signs of an economic recovery in the U.S,'' said Azusa Kato, an economist at BNP Paribas Securities Japan Ltd. in Tokyo.

The U.S. economy expanded an annualized 1.3 percent in the first quarter, the slowest pace since 2003.

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