Japan’s exports likely rose for the first time in two years in December as overseas demand improved, according to a Reuters poll, but a continued surge in coronavirus cases globally and extended lockdowns could hurt shipments in coming months.
Next week’s key data includes core consumer inflation, which is expected to show the fastest pace of decline in over a decade, further adding to deflation fears as a renewed state of emergency in Tokyo and some other areas due to the pandemic are likely to dent consumer spending.
Exports likely rose 2.4% in December from a year earlier, which would be the first increase since November 2018, the poll of 17 economists showed.
Imports were forecast to have fallen 14.0% in December from a year earlier, which would result in a trade surplus of 942.8 billion yen ($9.09 billion).
“Exports are recovering thanks to a pick up in overseas economies,” said Kenta Maruyama, an economist at Mitsubishi UFJ Research and Consulting.
“But the pace of recovery will likely slow down as they have come to the level before the pandemic and the virus cases are surging in Europe and other parts of the world.”
The finance ministry announces trade data at 8:50 a.m. on Thursday (2350 GMT Wednesday).
The core consumer price index (CPI), which includes oil products but excludes volatile fresh food prices, is expected to have fallen 1.1% in December from a year earlier due to energy price falls and weak consumer spending, the poll showed.
That would the fastest pace of year-on-year drop since September 2010, when the index also fell 1.1%.
The government releases core CPI at 8:30 a.m. on Friday.
The poll also showed the Bank of Japan is expected to keep its policy interest rate at minus 0.1% and the 10-year Japanese government bond yield target at around 0% at its policy meeting on Jan. 20-21. ($1 = 103.7500 yen)