Mubasher: Japan’s exports dropped in August, at a faster-than-expected pace, casting a gloom over the growth outlook for the world’s third biggest economy and raising the prospects of policy stimulus.

Japan’s outbound shipments, it main cornerstone of growth, tumbled by 8.2% year-on-year in August, initial estimates by the Finance Ministry showed on Wednesday.

While this marked the ninth monthly fall running, it came severer than a forecast of a 2.4% decline according to a FactSet survey of econmists.

This came as exports of chip-manufacturing equipment to China and other Asian importers remained weak.

China-bound exports plunged by 12.1% on an annualised basis, owing to weakening demand for semiconductor-making machines and auto components.

Exports to the US, fell by 4.4%, the first drop since 11 months, due to faltering demand for cars and parts.

Japan ran a trade gap of 136.3 billion Japanese yen (JPY) ($1.26 billion) last month, compared with a JPY 251 billion trade deficit in July.

August’ trade figures would probably raise the pressure on the Bank of Japan (BoJ) to relax its monetary policy further with uncertainty over the global economic growth and a dovish tendency among major central banks on the rise.

The BoJ is set to weigh the chances of monetary easing at its two-day meeting to end on Thursday.

By 9:07 am GMT, the USD/JPY pair inched up by 0.08% to JPY 108.2200.