Japan's exports slowed for a second straight month in August in an increasingly worrying sign that China's economic slowdown is hurting the world's third-biggest economy while shipments in Singapore slumped, increasing the chance that policymakers will inject fresh stimulus before too long.
The 3.1 percent annual increase in exports in August was smaller than the median estimate for 4.0 percent growth expected by economists in a Reuters poll, and less than July's 7.6 percent year-on-year rise.
In Singapore, exports on the month fell 4.6 percent in August on a seasonally adjusted basis, compared to a 0.5 percent rise predicted in the survey and a 2.5 percent gain in July, trade agency International Enterprise Singapore said in a statement.
Slowing exports could increase the chance of additional monetary easing from the Bank of Japan, because this could lead to lower factory output, less economic activity and less momentum needed to offset deflationary pressure caused by a collapse in oil prices.
"Our house view is that the BOJ will ease again in January, but the economic data suggest an increasing chance the BOJ will move at the end of October," said Hidenobu Tokuda senior economist at Mizuho Research Institute.
"I wouldn't be surprised if exports started falling. This is worse than the BOJ anticipated."
Exports destined for China, Japan's largest trading partner, fell 4.6 percent in August from a year ago, compared with July's 4.2 percent annual increase, finance ministry data showed. The decline was the first since February due to falling shipments of car parts and electronics, the data showed.
Exports to Asia rose 1.1 percent year-on-year in August, versus a 6.1 percent increase in July.
Exports to the United States have been a bright spot, but in August growth slowed. Exports rose an annual 11.1 percent last month versus an 18.8 percent rise in July.
Imports fell 3.1 percent year-on-year in August, more than the median estimate for a 2.2 percent annual decrease as the cost of crude and liquefied natural gas fell.
The trade balance was a deficit of 569.7 billion yen ($4.72 billion), versus the median estimate for a 541.3 billion yen deficit.
The Bank of Japan left unchanged its quantitative easing on Tuesday and Governor Haruhiko Kuroda voiced confidence that Japan can weather the hit from China's slowdown.
Some economists speculate the BOJ will expand its quantitative easing next month when it revises its long-term economic forecasts.
The government is also planning to introduce new policies to increase productivity by encouraging more capital expenditure, but weakening exports could make corporate Japan more reluctant to invest in manufacturing equipment.
In Singapore, non-oil domestic exports (NODX) slid 8.4 percent in August from a year earlier. That compared with a 3.0 percent contraction forecast in a Reuters poll. In July, non-oil domestic exports eased 0.7 percent from a year earlier with shipments to the United States, China and Europe declining.
Recent disappointing economic data such as July factory output stirred concerns over a technical recession and the need for policy easing next month.