The depreciation of the Japanese Yen helped boost Japan's exports in May, with a growth of 13.5%, marking the largest increase in nearly 19 months

Japanese exports in May showed a strong performance, driven by the depreciation of the yen, achieving the fastest growth since the end of 2022. On Wednesday, data released by the Japanese Ministry of Finance revealed that boosted by automobile and semiconductor exports, Japan's exports in May grew by 13.5% year-on-year, marking the sixth consecutive month of growth. This growth exceeded the economists' widely predicted 12.7% increase, marking the largest increase since November 2022. May imports increased by 9.5%, in line with expectations. In May, the trade deficit reached 1.22 trillion yen (approximately $7.7 billion), expanding from April's 466 billion yen. By region, Japan's exports to the United States grew by 23.9%, to China by 17.8%, while exports to the European Union declined by 10.1%. By export product category, automobile exports increased by 13.6%, with automakers including Daihatsu gradually resuming production after a safety certification scandal. However, the sustainability of this growth in the coming months remains uncertain due to the ongoing scandal. Following a government investigation that found safety data tampering or falsification, Japan suspended the delivery and sales of six models, including three models produced by Toyota. Other products that saw an increase in exports include semiconductor manufacturing equipment and electronic components. The Japanese Ministry of Finance stated that the continued depreciation of the yen also contributed to export growth, with the average exchange rate of the yen against the US dollar in May at 155.48, a depreciation of 14.9% compared to the same period last year. While the weak yen provides an advantage for Japanese exporters, concerns about cost-push inflation are increasing among importers. According to a report by the Bank of Tokyo-Mitsubishi UFJ in May, over 60% of surveyed Japanese companies stated that the depreciation of the yen would harm their profits. A previous survey indicated that the impact of the yen depreciation on the Japanese economy is intensifying, putting pressure on many Japanese importers to pass on the increased raw material costs to customers through price hikes. On the other hand, the yen depreciation benefits exporters, with companies like Toyota announcing strong profits as the depreciation enhances exporters' competitiveness and increases the value of repatriated overseas earnings