Japan's sales tax hike isn't just spurring concerns that its domestic economy may slow, some analysts worry the malaise may spread to other countries in the region.
Front-loading of spending by Japanese households to beat the consumption tax hike to 8 percent from 5 percent on April 1 "may have contributed to the healthy export performance of some of the non-Japan Asian (NJA) countries recently," Credit Suisse said in a note, adding the main spending beneficiaries were likely in the clothing, automobile and home electronics segments.
Economists widely expect Japan's household spending, as well as economic growth, will drop off in the wake of the tax hike, although forecasts vary widely.
"We expect economies that export a significant amount of discretionary consumer as well as transport and machinery products to Japan to be more vulnerable to the negative household spending shock," Credit Suisse said.
Exports from the Philippines and Thailand appear the most vulnerable to the likely downturn in Japanese household spending as a significant share of electronics and machinery products from these countries are used for domestic consumption and not for re-export, it said.
"Shipments to Japan represent a significant share of total exports from these two economies," it said, noting around 10 percent of Thailand's and 21 percent of the Philippines' merchandise exports go to Japan.
The Philippines' February exports climbed 24.4 percent on-year after rising 9 percent on-year in January, touching their highest level on a seasonally adjusted basis since the country first began compiling data in 1979, according to Credit Suisse estimates.
Source: NewsOnJapan
