Japan's Machinery Exports to China Slow Down or Affect its Economic Recovery

The Citigroup Global Markets Japan Company stated that the slowdown in Japan’s mechanical export growth to China indicates that Asian demand has become weak, and this may threaten the Japanese economy, which is gradually recovering from the March earthquake.

Today's chart shows that the amount of general machinery exported by Japan to China in May fell to 242.1 billion yen (3 billion US dollars), the lowest in four months, and the data came from Japan's Ministry of Finance. Exports of engines and construction machinery and other equipment account for 26% of Japan’s total exports to China. China is Japan’s largest exporter of goods. The chart also shows that the year-on-year changes in Japan’s overall exports have continued to decline in the past three months.

The monetary policy tightening in China and other emerging market countries may slow down its economic growth, suppressing stocks of Japanese machinery makers by more than 10%.

Japan’s exports to China in May decreased by 8.1% year-on-year, the largest drop since October 2009. Exports to Asia decreased by 8.7%. Many Asian countries from South Korea to India have raised interest rates to curb inflation. In May, Japan’s overall exports fell by 10.3%, which was an improvement over the 12.4% decrease in April.