Japanese exports are expected to have declined for a 13th consecutive month in December, but at a slower pace than in November, according to a Reuters poll.

Shipments in December likely fell 4.2% from the previous year, according to a poll of 16 economists published on Friday, following a drop of 7.9% the month prior. 

“Although exports stayed weak, information-related goods such as semiconductor manufacturing equipment and electronic components are picking up,” said economist at Mitsubishi UFJ Research and Consulting, Kenta Maruyama. “We expect exports will recover gradually.”

Analysts also said that developments in U.S.-Sino trade negotiations following the agreement of the “Phase 1” trade deal this week would bolster Japan’s exports in the months to come. 

Japan’s imports in December are also expected to have plunged 3.4% from the previous year, resulting in a trade deficit of 150 billion yen ($1.36 billion), as per the poll. The deficit was revised to 85.2 billion yen in November. 

Official trade data is due to be published by the Finance Ministry on January 23 at 8:50 a.m. Japanese time. 

The poll also revealed the core consumer price index, including oil goods but excluding volatile fresh food costs, climbed 0.7% in December from the previous year, following a rise of 0.5% in November. 

“Energy-related prices have picked up and price gains in some foods and clothes also contributed to boost core CPI,” said Yusuke Shimoda, senior economist at Japan Research Institute.

“But the pace of growth in core CPI is slow, excluding the impact from a sales tax hike.”

Last October, Japan hiked its sales tax from 8% to 10%, a move which was seen as crucial to boost the country’s damaged financial state. 

Economists in the poll forecast the Bank of Japan to keep its -0.1% interest rates and maintain the 10-year Japanese government bond yield target at around 0% in its next policy meeting set to be held between January 20-21. 

Sources close to Reuters said the Bank of Japan is expected to keep its monetary policy stable during the next week, and increase its economic growth forecast, as the U.S.-Sino trade deal and simmering tensions in the Middle East alleviate some pressure off the central bank to introduce more stimulus. 

 

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