Japan’s exports have snapped seven months of double-digit growth as the supply chain crisis hit the motor industry.
Exports expanded by 9.4% in the year to October, the smallest rise in eight months and lower than forecasts.
Shipments of cars were hit particularly hard, down by almost 37% from the same time in 2020.
The slowdown highlights how vulnerable Japan’s export-reliant economy is to supply chain bottlenecks.
Car exports to Japan’s two largest trading partners, China and the United States, dropped by almost half, according to data from the country’s Ministry of Finance.
At the same time imports rose by a slower-than-expected 26.7%, meaning that Japan’s imports were 67.4 billion yen ($587m; £437m) higher than its exports.
Supply chain problems have impacted economies around world this year as companies struggle to secure the goods they need to operate their businesses.
Carmakers have been hit particularly hard by supply issues, especially the shortage of computer chips.
In August, the world’s biggest carmaker Toyota slashed its production forecast due to the shortage of semiconductors.
‘Rebound in the coming months’
But one expert believes the supply shortages faced by Japan’s carmakers should have eased significantly by December.
Tom Learmouth, Japan economist at Capital Economics, said the impact is likely to be temporary: “Vietnam is the most important supplier of parts for Japanese carmakers in the region and had been hit with factory closures to control its Delta outbreak.
“We think that the rebound in exports will pick up pace over the coming months as production at Japanese carmakers returns to normal.”
Official figures also signalled reluctance by the country’s manufacturers to invest in new equipment. Core machinery orders were flat in September compared to the previous month.
Earlier this week, official figures showed that Japan’s economy shrank faster than expected in the third quarter of the year, hit by global supply disruptions and a resurgence in Covid-19 cases. Gross domestic product contracted by 3%, compared to the same time last year.
Japan’s newly-elected prime minister Fumio Kishida is expected to announce the details of a new economic stimulus package reportedly worth “several tens of trillion yen” on Friday.