Daily Times

Japan’s exports likely fell at a faster pace in May, down for the sixth straight month, as the US-China trade war takes a toll on the economy, a Reuters poll showed on Friday.

The Bank of Japan is expected to keep its targets for short-term interest rates and its long-term government bond yield unchanged next week, according to the poll.

Consumer prices, another key gauge for market watchers on policy, likely edged down in May, putting pressure on the BOJ as it remains far from achieving its elusive 2% inflation target.

“Exports likely dropped as factories halted during the 10-day national holidays and external demand is weakening,” said Koya Miyamae, senior economist at SMBC Nikko Securities, referring to the Golden Week holiday that was extended this year to mark the enthronement of a new emperor.

“We need to see how exports data for June fared to examine its trend but the intensified US-China trade war will have more of an effect on trade in June.”

Exports in May are forecast to have dropped 7.7% from a year earlier, according to the poll of 16 economists, compared with a 2.4% contraction in April and the biggest drop since January.

May imports are seen up 0.2% from a year earlier after a revised 6.5% gain in April, resulting in a trade deficit of 979.2 billion yen ($9.04 billion), the poll showed.

The Finance Ministry will release trade data at 8:50 a.m. Japan time on June 19 (2350 GMT, June 18).