Japanese exports drop 10.3 per cent in May as impact from quake and tsunami lingers

TOKYO – Japan’s exports dropped for the third straight month in May, hit by massive production losses in the auto sector following the March 11 earthquake and tsunami disasters, the government said Monday.

Exports fell 10.3 per cent year-on-year to 4.76 trillion yen ($6 billion). Imports rose 12.3 per cent to 5.61 trillion yen, resulting in a trade deficit of 853.7 billion yen – Japan’s second-biggest after a 967.9 billion yen deficit in January 2009, the finance ministry said.

“Exports were down again as auto shipments tumbled in the month. Automakers struggled with parts shortages after the quake, and did not see a recovery in production in May,” said economist Hajime Inoue at the Japan Research Institute Ltd.

The March disasters, which left more than 23,000 people dead or missing in northeastern Japan, destroyed hundreds of factories, forcing automakers – a pillar of this nation’s economy – and manufacturers to suspend production.

Toyota Motor Corp. says the supply crunch cost it production of 550,000 vehicles in Japan by the end of May. Toyota’s car production in May was half of normal levels.

Honda Motor Co. also produced vehicles in Japan at half of its usual level in May due to parts shortages.

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Overall Japanese auto exports in May plunged 38.9 per cent and shipments of auto parts dropped 18.5 per cent, the ministry said.

Among key regions, U.S.-bound auto exports nosedived 43.5 per cent, and auto exports to China – Japan’s biggest trading partner – tumbled 40.1 per cent. Vehicle shipments to Asia and the European Union were down 27.6 per cent and 35.8 per cent respectively.

Economist Inoue said Japanese exports would likely rebound later in the year as auto production was expected to be back at pre-disaster levels in the coming months.

Japan’s exports to the United States fell 14.6 per cent in May, the ministry said. Exports to China declined 8.1 per cent. Asia-bound shipments were down 8.7 per cent, while exports to the European Union fell 8.8 per cent.

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