Japan's July exports clock steepest plunge in over four years, dropping by a more than expected 2.6%

Japan’s exports plunged 2.6% year over year in July, their steepest drop since February 2021, as shipments to its two largest markets slipped.

The fall was sharper than the 2.1% contraction expected by economists polled by Reuters and compared to the 0.5% drop seen in June.

Imports to the world’s fourth-largest economy sank 7.5%, compared to the 10.4% fall expected by the Reuters poll.

Exports to the U.S. also continued to fall, dropping 10.1% in July and slightly softer than June’s decline of 11.4%. The U.S. is the largest market for Japanese exports.

Shipments to mainland China — Japan’s second largest export market — declined 3.5% compared to the same month last year, but shipments to Hong Kong spiked 17.7%.