May exports 0.6 yy, weakest since Feb 2021 vs fcast 0.8
Car exports 66, offsetting weak semiconductor sector
Imports, trade deficit shrink on soft commodity markets
April core machinery orders 5.5 on rosy servicesector investments

TOKYO, June 15 Reuters Japan39;s exports grew unexpectedly in May on robust car sales, though the rate of expansion slowed to a crawl as inflation and rising interest rates bit into global demand, highlighting a patchy recovery in the world39;s thirdlargest economy.

While the country39;s hotels, restaurants and other service sector companies have seen a boom in business since COVID curbs were eased, its factories have been struggling amid weakening demand for cyclical items such as chipmaking machines.

Ministry of Finance data showed on Thursday that exports rose 0.6 yearonyear in May, for the 27th straight month of rises, led by 66 growth in car shipments.

The overall exports growth was the slowest since February 2021, but the outcome beat a 0.8 yearonyear decrease expected by 16 economists in a Reuters poll, and followed a 2.6 rise in April.

Semiconductor equipment and related exports were the main sources of export weakness, which chimes with the sharp drop in exports to countries like Taiwan and South Korea…offset by continued strength in motor vehicle exports, said Darren Tay, Japan economist at Capital Economics.

This year, domestic demand may temporarily outpace slumping exports as a key driver of growth, said Takeshi…