Japan’s trade data beat in July

Japan’s trade deficit widened to its largest level in five months in July, as exports slowed thanks to faltering demand in China and other key markets, and imports fell by less than forecast.

Meanwhile, imports fell 3.2% as sliding oil prices reduced the cost of purchasing gas and oil from the Middle East and Southeast Asia.

Japan’s exports rose 7.6 percent in July from a year earlier, Ministry of Finance data showed on Wednesday, in a sign overseas demand is holding steady.

That was well shy of forecasts for a deficit of 53.0 billion following the downwardly revised 70.5 billion yen shortfall in June (originally -69.045 billion yen).

China’s central bank devalued the yuan last week, sparking concern the economy is growing more slowly than thought and prompting fears it could start a currency war in which countries compete to boost exports by cutting the value of their units.

“There is still time for exports to recover, but as of now they look a little weak”.

The economy contracted at a 1.6 percent annual pace in April-June after a 4.5 percent expansion in the first three months of the year, as the recovery again faltered.

Shipments to Asia rose 6.1 per cent year-on-year in July, versus a 10.1 per cent annual increase in the previous month.