Toyota(US:TM) Zhi Tong Cai Jing·2025-08-20 03:09Core Viewpoint - Japan's exports are experiencing the most significant decline in over four years, primarily due to the impact of U.S. tariff policies, raising concerns about the country's economic growth prospects [1][3]. Export Performance - In July, Japan's export value decreased by 2.6% year-on-year, surpassing economists' predictions of a 2.1% decline, with automotive and steel exports leading the downturn [1][3]. - Exports to the U.S. fell by 10.1% in July, with automotive and parts exports dropping by 28.4% and 17.4%, respectively, indicating that Japanese companies are absorbing some tariff costs to maintain sales [3][5]. - The overall export volume increased by 1.2%, suggesting that companies are lowering prices to offset tariff impacts [1]. Import Trends - Japan's imports decreased by 7.5% in July, with significant declines in crude oil, coal, and liquefied natural gas imports [1][5]. - Despite the drop in imports, Japan recorded a trade deficit of 117.5 billion yen [1]. Economic Outlook - The continuous decline in exports raises concerns about Japan's ability to sustain economic growth, especially as domestic demand remains weak [3][5]. - Economists predict that Japan's exports may stagnate as companies adjust to the new trade environment, with the government recently downgrading its economic outlook due to the expanding losses from U.S. trade measures [5]. Tariff Impact - The U.S. imposed a 25% tariff on Japanese automotive parts and increased steel tariffs to 50%, significantly affecting Japan's export dynamics [3][4]. - A trade agreement reached in late July aims to set automotive and general goods tariffs at 15%, but full implementation is still pending [4]. Currency Effects - The average exchange rate of the yen against the dollar in July was 145.56, appreciating by 8.9% compared to the same period last year, which may further complicate export competitiveness [5].