Despite a brief setback in the tail end of 2018's third quarter, Japan's export market rebounded in October. Given the importance of exports - particularly of automobiles, as well as countless consumer electronics - to the overall Japanese economy, it is likely that those with a close eye on Japan's markets will find this development to their liking.
According to Reuters, exports increased 8.2 percent during October 2018 on a year-over-year basis, with import purchases from the U.S. playing a considerable role in this uptick. Although economists surveyed by the news provider had expected a slightly greater export-market uptick of exactly 9 percent, there are only positive feelings regarding the rebound among financiers and economic experts who know the region and its businesses well.
Koya Miyamae, a senior economist working with SMBC Nikko Securities, painted a multifaceted picture of the issue in an interview with Reuters, noting the impact of various natural disasters that hit the country throughout the course of 2018, including a typhoon, an earthquake, floods and several heat waves.
"Japan's exports rebounded from a decline caused by natural disasters, but they are losing momentum compared with last year due to sluggish shipments to Asia caused by China's slowdown," Miyamae said to the news provider. "The U.S.-China trade war has not yet had much impact on Japan's exports, but it warrants attention given that it could cause full-blown effects from next year onwards."
Exports to China in particular, which had been a cause for concern in reports regarding the dip in outgoing goods' sales, surged to a 9 percent year-over-year increase. The aforementioned ongoing trade dispute between China and the U.S. over various tariffs and raw materials sales colors nearly all discussions of the Japanese economy, and with good reason, but did not seem to have any effect on China's purchases of plastic raw materials, engines, automobiles and other desired commodities from Japan.
Additionally, exports to the U.S. jumped 11.6 percent during the same period, with cars again being the main catalyst of sales. Looking at figures like that, it's reasonable to see why economic experts remain on the lookout for detriments to Japan's economy caused by the trade conflict but also don't see them materializing in the immediate future.
Nevertheless, Japan has other economic difficulties to face: BBC News reported that Japan's gross domestic product shrank at an annualized rate of 1.2 percent over 2018's third quarter. While some of this is attributed to the year's natural disasters, it still has Japanese government and business leaders somewhat worried, especially when considered alongside the problems that trade protectionism could cause.