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Japan's exports to US drop for second straight month

Pricier oil leaves Japan with $2bn overall trade deficit in July

Japan's U.S.-bound shipments fell by 5.2% in July, while its exports to China rose 11.9%.

TOKYO -- Japanese exports to the U.S. declined 5.2% on the year in July, largely due to reduced auto shipments, narrowing Japan's trade surplus over its partner by 22.1%.

The slowdown in exports follows a 0.9% fall in June.

Japan's surplus with the U.S. came to 502.6 billion yen ($4.5 billion). For the world as a whole, Japan posted a deficit of 231.2 billion yen, stemming from higher crude oil prices in July.

The sluggish U.S.-bound shipments reflected a 7% drop in sales of Japanese cars in July, rather than the global trade tensions, according to SMBC Nikko Securities economist Junichi Makino.

Still, the wave of protectionism poses a threat. U.S. President Donald Trump said in May that his government might raise auto tariffs to as much as 25%, and Makino said duty increases could hit Japan's exports to America hard.

Despite the monthly trade deficit, Japan's overall exports look solid thanks to strong demand for semiconductor components and chipmaking equipment from China. Exports to China climbed 11.9%, marking a fifth straight year-on-year increase.

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