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Time of India
17-07-2025
- Automotive
- Time of India
Japan's exports drop as US tariffs hit automobiles, pressure set to intensify
June exports down 0.5% yr/yr vs forecast rise of 0.5% Japan's exports fell for a second straight month as sweeping U.S. tariffs took a toll on the country's manufacturers, with its fragile economy exposed to greater risks from the global trade war in coming months. Japan failed to clinch a deal with the U.S. before the July 9 expiration of the temporary pause on the country-specific tariffs after it focused on eliminating the existing sectoral 25% tariffs on automobiles, a mainstay of the export-reliant economy. Washington now plans to impose tariffs of 25% on Japanese imports, unless a trade deal is struck by August 1. "The tariff impact is likely to intensify in coming months, when the tariff rate is finalised and Japanese companies begin to fully pass on costs to consumers in the U.S., which would hamper competitiveness of Japanese products there," Daiwa Institute of Research economist Koki Akimoto said. Exports from the world's fourth-largest economy dropped 0.5% in June year-on-year in value terms, compared with a median market forecast for a 0.5% increase and a 1.7% decrease in May, the first decline in eight months. Exports to the United States tumbled 11.4% in June from a year earlier, the largest monthly percentage decline since February 2021, dragged down by a 26.7% plunge in automobiles, a 15.5% fall in auto components and a 40.9% plunge in pharmaceuticals. But the volume of automobile shipments rose 3.4%, indicating Japanese automakers are cutting prices on exported cars and absorbing tariff costs to stay competitive. "Japanese automakers have so far kept production levels by sacrificing margins, so the tariff impact on their production activities has been limited," Koya Miyamae, senior economist at SMBC Nikko Securities , said. But Daiwa's Akimoto said Japanese companies would be forced to raise prices eventually, as trade negotiations drag on and the yen stays relatively strong. Japan exported 21 trillion yen worth of goods to the United States last year, with automobiles representing roughly 28% of the total. Japan's trade surplus with the U.S. in June fell 22.9% to 669 billion yen ($4.51 billion). Exports to China were down 4.7%, the data showed. Total imports grew 0.2% in June from a year earlier, compared with market forecasts for a 1.6% drop. As a result, the trade balance stood at a surplus of 153.1 billion yen ($1.03 billion), compared with a forecast for a surplus of 353.9 billion yen. U.S. tariffs are adding to pressure on the Japanese economy which is struggling due to lacklustre domestic consumption. Japan's economy shrank in the first quarter as rising living costs hurt demand. Prolonged uncertainties over the impact of the tariffs and the course of trade negotiations will likely force the Bank of Japan to keep focusing on downside risks to the economy and to put rate hikes on hold for the time being, analysts say.
Japan Times
25-02-2025
- Business
- Japan Times
Vegetable prices continue surging in Japan
Prices of vegetables and rice have been soaring in Japan due to unfavorable weather and rising production costs. Prices of fresh vegetables in January climbed 36% year on year, with prices of cabbage and Chinese cabbage shooting up by about three and two times respectively, according to consumer price data released by the internal affairs ministry Friday. Rice prices rose 70.9%, with the pace of increase marking a record high for the fourth straight month. For prepared food, there have been moves to pass higher production costs on to retail prices, putting pressure on households. The recent lack of rain is a factor behind the surge in vegetable prices, according to the ministry and other sources. The pace of rise for Chinese cabbage accelerated from December's 55.7%, partly reflecting a surge in demand as a substitute for cabbage, whose prices remain elevated. Rice prices have been on an uptrend since last summer, when they soared amid supply shortages. The higher rice prices have led to markups of related products, with prices in January rising 9.2% for onigiri rice balls and 4.5% for sushi served at restaurants. Earlier this month, the government decided to release some rice that had been stockpiled by the state to ease the distribution bottlenecks, a factor contributing to the spike in the prices of the staple food. Koya Miyamae of SMBC Nikko Securities predicted that the rate of rice price growth will remain high as moves to pass on higher production costs continue. Prices of food excluding fresh food in the first half of this year are expected to rise over 5% from a year before, pushed up by spikes in the prices of rice-based products, according to Miyamae.
