Fall in US consumer spending slows Japan''s export growth

Mumbai: A decline in US consumer spending has started showing its effects on the Japanese economy, its biggest trading partner. Japan''s exports to the US fell for the first time in two years even as its exports to the fast-growing Asian and European markets increased.

Shipments to the US dropped 4.8 per cent, the steepest fall since May 2004.

Japan''s exports rose 8.3 per cent in April from a year earlier, down from 10.3 per cent in March, the ministry of finance said in Tokyo.

Exports to the US, the destination of a fifth of Japanese exports grew the slowest in four years with the weakening of US consumer spending, especially in car sales. Exports to all other regions rose, with those to Asia climbing at the fastest pace in three months.

Shipment of cars fell 7.5 per cent, the biggest decline since April 2004 when they slid 15.1 per cent. Autos represent about 10 per cent of Japan''s exports to the US.

Toyota Motor Corp., the world''s largest carmaker by market value, is shifting production to factories in Canada, Russia and China to beat a US slowdown. Sales growth in North America, Toyota''s largest market, is expected to slow to 1.6 per cent this fiscal from 15 per cent.

Machinery orders in Japan fell 4.5 per cent in March and companies said they expect orders to plunge 11.8 per cent this quarter

The US economy expanded by an annualised 1.3 per cent in the first quarter, the slowest pace since 2003.

A weak yen also failed to counter the slump in demand. The Japanese currency fell 1.5 per cent against the dollar in April from the same month a year ago, while the euro surged 12 per cent against the yen in the same period.

The yen was ruling at 121.57 a dollar in early Tokyo trading.

Recent data, however, show economic growth in the US may accelerate. Consumer sentiment rose in May for the first time in four months since January helped by strong growth in the labor and stock markets.