Japanese trade data for May has missed expectations, led by a steep contraction in the value of exports to China.
According to the Japanese government, the value of exports fell by 11.3% in the 12 months to May, slightly undershooting forecasts for a smaller contraction of 10.4%.
The annual decline was larger than the 10.1% fall seen in April, and the steepest recorded since January this year.
By destination, exports to China — the nation’s largest trading partner — tumbled by 14.9%, well below the 7.6% decline seen in the year to April.
As a consequence, the value of exports to Asia slid by 13% over the same period, again steeper than the 11.1% contraction recorded previously.
Exports to the US fell by 10.7% compared to May 2015, a slight improvement on the 11.8% decline registered in April.
Recent strength in the Japanese yen, making Japanese goods and services less competitive in offshore markets, along with tepid economic growth in the global economy, likely contributed to the weakness seen in May.
On the other side of the ledger, the value of imports also declined, although at a far slower pace than seen in April.
According to the government, imports dipped by 13.8% — in line with forecasts — but far narrower than the 23.3% contraction recorded in the 12 months to April.
As a result of the miss on exports, the nation’s trade balance swung back to deficit, coming in at 40.7 billion yen compared to a surplus of 823.5 billion yen in April.
It was below expectations for a surplus of 40 billion yen.