A U.S. housing crisis sparked a global sell-off of shares and drove the yen to a 4 1/2 month high last week, prompting concern that profit at exporters including Toyota Motor Corp. will be hurt by waning U.S. demand and a stronger currency. Exports have driven Japan's longest economic expansion in more than 60 years.
"Prolonged market turmoil could hurt consumer sentiment in the U.S., which would have a considerable impact on exports,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. "Should the yen strengthen abruptly that would really weigh on exports and production, leaving the economy without anything to rely on for growth.''
Exports rose 11.7 percent last month, less than the 13 percent expected by economists and 16 percent in June. Imports climbed 16.9 percent, more than the 16.1 percent prediction and 11 percent gain in the previous month.
The yen traded at 114.32 per dollar at 9:07 a.m. in Tokyo from 114.33 before the report was published.
Global demand is already showing signs of slowing. Advantest Corp., the world's largest maker of memory-chip testers, said profit for the three months ended June 30 slid 13 percent as chipmakers pared spending.
The slowdown in export growth restricted the economy's expansion to an annual 0.5 percent pace in the second quarter, less than a sixth of the 3.2 percent in the first three months.