A jump in Japan's exports thanks to strong demand from America and China

 Japan's exports jumped in June, led by US demand for cars and shipments to China of chip-making equipment, raising hopes of an export-fueled recovery in the world's third-largest economy.

Japanese exports increased 48.6% year-on-year in June, posting double-digit gains for the fourth consecutive month, but the rate was greatly inflated by the sharp downturn caused by the Covid pandemic last year.

Export growth remained strong even as Japan's auto production and shipments were hit by the global chip shortage.

With consumer spending slashing due to renewed anti-coronavirus restrictions in Tokyo, policymakers are counting on external demand to compensate.

In a positive indicator for the trade-dependent economy, exports grew 23.2 percent in the first half of this year, rising for the first time in five periods, and exceeding pre-pandemic levels recorded in the first half of 2019. This is the fastest growth rate since the first half of 2010.

Economists had expected exports to grow 46.2 percent in June, according to the results of a Reuters poll, after a 49.6 percent increase in May, the strongest monthly since April 1980.

"Maybe China's economy is slowing down but there are measures to stimulate it. With the help of the recovery in Europe and America, it is expected to accelerate again... that will maintain the upward trend of Japanese exports, supported by exports of automobiles, capital goods and those related to information," said Takeshi Minami, chief economist at Norinchukin Research Institute. ".

In terms of destination, exports to China, Japan's largest trading partner, increased 27.7% in the year to June, led by demand for chipmaking equipment, raw materials and plastics.

Exports to the United States increased 85.5 percent in June, led by shipments of automobiles, auto parts and engines.

Imports rose 32.7% year-on-year in June, while the median estimate was for an increase of 29%.

The trade surplus was 383.2 billion yen ($3.49 billion), compared with an average of 460 billion yen expected.

Japan's economy shrank 3.9% in the January-March quarter and likely barely grew in the second quarter, with spending on services negatively affected by the pandemic.