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Wednesday, May 25, 2005

Japan Export Volume Down

The volume of Japanese exports fell year on year in April, reinforcing fears that the country’s reliance on global demand to bolster its economy may have come to an end.

"Wednesday’s figure from the Ministry of Finance showed a 1.5 per cent year-on-year fall in exports, following a slight decline in the first quarter of the year. A March rise in export volumes by 1.1 per cent on the year had failed to make up for a 3.1 per cent fall in January and a 4.2 per cent fall in February.

Trade surplus narrowed 10.4 per cent in April from a year ago.

The news would mean that further recovery is increasingly dependent on whether domestic consumers start spending at a faster pace at a time when the underlying drivers of consumer confidence are decidedly mixed.

Well given Japan's demographics, I considered this latter possibility - ie a consumer rebound - to be extraordinarily remote. A one off quarterly boost is not of course excluded, but sustained, secular growth in consumer activity in Japan (as in Germany, as in Italy) is OFF the agenda.

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