Japan’s June exports seen extending solid gains

TOKYO: Japan’s exports are expected to have risen for a seventh straight month in June, a Reuters poll showed on Friday, indicating that a recent revival in global demand will continue to support a moderate recovery in the world’s third-biggest economy.
The poll of 20 economists also found the Bank of Japan (BoJ) will keep its monetary policy settings unchanged when it meets on Wednesday and Thursday next week, reflecting the gradual uptick in growth.
Enjoying a tailwind from a weaker yen, exports are predicted to rise 9.5 percent year-on-year last month, the same poll showed, after a 14.9 percent jump in May — the fastest growth rate in more than two years.
Imports are forecast for a 14.6 percent rise from a year ago, up for a sixth straight month, boosted by higher oil prices and solid domestic demand. The poll tipped a resulting surplus at 484.7 billion yen ($4.27 billion), versus a trade deficit of 203.4 billion yen in May.
“A weak yen boosted exports’ value. They kept their solid trend but the momentum has slightly slowed compared with late last fiscal year,” said Taro Saito, director of economic research at NLI Research Institute.
Saito said Japanese exports would benefit from rising demand in key foreign markets.
The same poll found the BoJ would keep its short-term policy interest rate at minus 0.1 percent and the 10-year government bond yield target around zero percent at the July 19-20 review.
Japan and much of the export-reliant Asian economies have benefited from an upturn in global demand since late 2017 giving policy makers hope that growth will continue to pick up over the next few quarters.
Sources have told Reuters the central bank is set to raise its economic growth forecasts but cut its rosy inflation outlook next week, reinforcing expectations it will lag well behind major global central banks in dialing back its massive stimulus program.
Japan’s economy grew at an annualized 1 percent in the first quarter on solid exports and private consumption. But core consumer prices in May rose just 0.4 percent from a year earlier, some distance from the BoJ’s 2 percent target.

Tokyo stocks edge up by close
Tokyo stocks edged up Friday ahead of a three-day weekend with investors awaiting a string of key meetings and data releases, while Uniqlo’s operator dropped on lower-than-expected earnings.
The market extended a global rally driven by comments from Federal Reserve Chief Janet Yellen that investors interpreted as a sign US interest rates would rise gradually.
Next week sees the release of data on Chinese second- quarter growth, US housings starts and German business confidence, as well as policy meetings of the Bank of Japan (BoJ) and European Central Bank (ECB).
Japan’s latest earnings season also starts next week.
“Markets are pricing in chances of tapering moves by the ECB (on its easing program), offsetting the impact from Fed Janet Yellen’s dovish comments” this week, Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Bloomberg News.
Tokyo’s benchmark Nikkei 225 index inched up 0.09 percent, or 19.05 points, to 20,118.86 — ending the week 0.95 percent higher.

The Topix index of all first-section issues gained 0.39 percent, or 6.37 points, to 1,625.48 — putting on 1.15 percent since last Friday’s close.
“Buying sentiment was not so strong as players are on the sidelines ahead of a long weekend,” Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP.
Japanese financial markets will be closed on Monday for a national holiday.