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Japan’s extended exports slump possibly can push BOJ to ease next week

By ET Bureau - October 21, 2019 1 Mins Read

Japan's extended exports slump possibly can push BOJ to ease next week

Japan’s exports contracted in September, adding to the speculation of central bank easing monetary policy next week to support an economy hit by a slowdown in the global demand. A bitter Sino-U.S. trade war and the slow growth in China have multiplied the risks of the global recession, darkening the outlook for Japan’s economy as the world’s third-largest.
Exports in September slumped 5.2% from the last year, dragged down by car and airplane parts to the U.S and semiconductor production equipment to South Korea. This fall was more significant than a 4.0% drop expected by economists, which were marked the longest run of export declines since a 14-month stretch from October 2015 to November 2016. In terms of the volumes, exports fell 2.3% in the year to September, which was the second consecutive month of declines.
Though overall conditions are currently stable, this could become a factor for monetary easing if it did hit Japan’s economy as a whole. The BOJ will “certainly” reduce short or medium-term interest rates to ease monetary policy, Governor Haruhiko Kuroda confirmed on Saturday. The trade deficit is expected to be reduced over the coming months.

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