TOKYO: Buoyant sales of cars and electronics led Japan’s exports to a 14th straight month of growth in January but manufacturers’ business confidence slid — highlighting fears of the rising yen disrupting an export-led recovery.
The trade data came on the heels of the Reuters Tankan survey that found Japanese manufacturers’ confidence deteriorated sharply in February, pointing to global stock market turmoil and the yen undermining business sentiment.
Such variable indicators underscore the challenge facing the Bank of Japan’s leadership trio — reappointed Governor Haruhiko Kuroda and two new deputies — as they work to stimulate the economy out of decades of stagnation.
The low mood of manufacturers in the Tankan survey was at odds with Ministry of Finance data out on Monday showing that exports grew 12.2 percent year-on-year in January, topping the prior month’s 9.3 percent gain and economists’ estimate of a 10.3 percent increase.
Monday’s news also followed gross domestic product data out last week showing Japan recorded its eighth straight quarter of economic expansion over October-December.
A strong currency eats into Japanese manufacturers’ profits and could disrupt the virtuous cycle of business investment, consumer spending and growth that authorities have struggled to set in motion.
“Our consolidated profits have deteriorated because of a strong yen,” a manager of a transport equipment maker wrote in the survey.
Economists believe global demand should continue to drive Japanese exports and broader economy in the coming months, even though the rising yen clouds the outlook.
Sustained yen appreciation of 5 percent would lower GDP-based real exports by 0.2 percent in the first year, 1.1 percent in the second and 1.2 percent in the third year, which may not be fatal but could not be ignored, said Yoshimasa Maruyama, chief economist at SMBC Nikko Securities.
“We don’t forecast exports to sputter but need to bear in mind the risk that a strong yen may curb their driving force.”
The Reuters Tankan sentiment index for manufacturers stood at 29 in February, down from the previous month’s 11-year high of 35, the survey conducted January 31 to February 14 found. The monthly poll closely tracks the Bank of Japan’s key quarterly tankan.
Monday’s trade data showed exports to China, Japan’s biggest trading partner, jumped 30.8 percent year-on-year in January, due in part to an export surge before the Lunar New Year that happened later than last year. The gain was led by semiconductor production, equipment, car engines and hybrid cars.
Shipments to Asia as a whole, which account for more than half of Japan’s exports, grew 16.0 percent in the year to January.
US-bound shipments rose 1.2 percent in the year to January, led by steel, batteries and medicines, while car shipments declined 3.9 percent. The small rise in US-bound exports followed a 3.0 percent gain in the previous month.
Japan’s trade surplus with the US fell an annual 12.3 percent in January to 349.6 billion yen, a second declining month.
The overall trade balance swung to a deficit of ¥943.4 billion, the first trade deficit in eight months.
“Net exports may return to growth this quarter,” said Marcel Thieliant, senior Japan economist at Capital Economics.
“Looking ahead, the export climate index climbed to a fresh high last month and suggests that external demand remains healthy. We’ve penciled in a 4.5 percent rise in export volumes this year.”
Japan exports grow, but manufacturers’ confidence slips amid fears of rising yen
Japan exports grow, but manufacturers’ confidence slips amid fears of rising yen
Supplier hub to anchor Saudi car industry, says TASARU CEO
RIYADH: Saudi Arabia’s Public Investment Fund is stepping up efforts to localize automotive manufacturing, with its portfolio company TASARU announcing partnerships with five Tier-1 global suppliers to localize advanced component manufacturing in the Kingdom.
The agreements were announced at the fourth PIF Private Sector Forum in Riyadh. TASARU also revealed plans to establish a new Supplier Hub in the King Salman Automotive Cluster in King Abdullah Economic City, designed to support next-generation vehicle development and strengthen the national automotive ecosystem in alignment with Vision 2030.
Speaking to Arab News on the sidelines of the forum, Michael Mueller, CEO of TASARU, said: “You cannot build cars without having the right partners from the supplier side, and with that, together with the OEMs, we selected the partners that we just announced today to localize them.”
He added that the presence of large international suppliers is expected to attract smaller Tier-2 and Tier-3 manufacturers, helping the ecosystem scale.
The five partners include Shin Young for metal stamping and body structures, JVIS for exterior plastics, and BENTELER for chassis and hot-formed steel components. Guangxi Fangxin will supply interior systems, while Lear Corp. completes the group, with all expected to establish manufacturing operations in the Kingdom.
Founded more than three years ago, TASARU was established to introduce new technologies into Saudi Arabia’s mobility sector. The company has prioritized localizing smaller OEM and supplier businesses while bringing next-generation solutions into the Kingdom.
Mueller said visible progress on factory construction by Ceer, Lucid and Hyundai is shifting perceptions about the sector’s viability.
“A lot of people on the sideline watched whether automotive is really happening,” he said. “Now they recognize that the factories … are under construction, so that’s the first signal that it’s not just the bubble. It’s not just PowerPoint. It’s getting real now on the ground.”
The CEO shares that KAEC is positioned as a hub for Saudi Arabia’s automotive industry, making it a strategic location for the TASARU Supplier Hub. The facility is designed to support OEMs and next-generation vehicles, including Ceer and Lucid Motors, through a shared, just-in-time manufacturing model with integrated logistics and regulatory support.
TASARU will provide infrastructure and operational support, while partners bring technical expertise and gradually develop training centers to build a local workforce, Mueller said.
He positioned Saudi Arabia as an attractive base for global suppliers because of its access to minerals and rare earth resources, energy availability and coordination across PIF portfolio companies and government entities.
“They have access to minerals. They have access to rare earth. They can benefit from what is already existing. They have stable energy solutions. I think this footprint might benefit from the whole ecosystem as it is, not just automotive,” he said.
Companies without a Saudi footprint risk missing a “huge opportunity,” Mueller added.
He said advancing the industry will require clearer regulatory frameworks, including defined trigger points and licensing pathways that allow companies to execute their mandates.
“Of course, you need to have more or less the regulatory framework to allow autonomous cars, sooner or later, on the streets. But it's happening, and this is a huge chance also for Saudi Arabia,” Muller said.
He added: “If you are advanced in bringing such regulations onto a fast track, then you have a huge opportunity to be one of the first countries that establish this.”
With rising traffic levels in Riyadh, Mueller said emerging mobility technologies could help solve first- and last-mile transportation challenges.
“If the Metro is already full, that is good because people are using it. Now, you have to connect the dots. You have to finally make sure that people get from home to the metros and or to the bus station. So this first last-mile transportation is something where new technologies might help to bridge that,” he said.
The CEO said the project is expected to take roughly one and a half to two years for suppliers to go live. More broadly, the initiative reflects Saudi Arabia’s transition from investment attraction to full-scale industrial localization, strengthening local content, private-sector participation, and long-term industrial resilience in line with Vision 2030.
