Japanese exports weaken on sluggish demand from Emerging Markets

TOKYO - Export growth in January fell by more than expected to 9.5% y/y (consensus: 12.7% y/y; prior: 15.3% y/y), underscoring risks to Japan’s economic pickup, after a disappointing Q4 GDP outturn.

“Exports to the advanced economies held up well, with exports to the US and EU rising by 21.9% y/y and 20.3% y/y respectively; but exports to emerging markets were sluggish,” says BBVA Bank.  “Meanwhile, imports rose by 25.0% y/y in January, as the weak yen and rising energy prices continued to boost import prices.
“As a result, the trade deficit in January rose to a record high of ¥2.79 trillion. We expect GDP growth of 1.5% in 2014, with downside risks from weaker than expected exports and the drag on growth from the scheduled 3% hike in the consumption tax in April. www.bbvaresearch.com (ATI).