Japan’s exports plunged in July, the Ministry of Finance said. The nation swung back to a trade deficit. The yen fell following the worse-than-expected report.
The trade gap totaled 517.4 billion yen ($6.5 billion), compared to a 60.3 billion yen surplus in June. The consensus forecast had called for a 275 billion yen deficit. Exports fell 8.1% year over year, exceeding to an estimated 3.6% fall.
Shipments to top trading partner China dropped almost 12%, while exports to the United States gained 4.7%. Imports increased 2.1%.
The yen pulled back after the report, with the dollar rising to 79.26 yen from 79.21 yen before the numbers were released. The euro rose to 98.84 yen from 98.77 yen.
The report increases pressure for government spending or monetary easing to support the nation’s economy by bolstering domestic demand.
The weak Japanese trade figures also helped pull down Asian markets Wednesday. The Nikkei ended 0.3% lower. Hong Kong’s Hang Seng Index slid 1.2% and China’s Shanghai Composite Index retreated 0.5%.